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A Regulatory Body in the Field of Arbitration: A Boon or a Bane

Written by: Nishtha Kheria and Varun Vikas Srivastav, Students, Amity Law School, Noida

Introduction:

Arbitration is an acknowledged private legal method used to settle disputes between two or more parties that define Arbitration as a source of a dispute or difference between not less than two parties for resolution after judicially detecting both parties by a person or persons other than a court of qualified jurisdiction. where the parties consign the dispute resolution process as well as the consequence of the dispute to a nonpartisan third party i.e. the arbitrator (or the arbitral tribunal)[1]. The arbitrator/ arbitral tribunal examines the case of the parties on benefits, follows as a clear procedure to mediate the conflict, and the arbitral proceedings then complete into an obligatory decision i.e. the arbitral award Arbitration is a creature of agreement[2]. An agreement to arbitrate is therefore really an alliance between the parties to replace a tribunal other than the courts of the land to determine their rights and replacement of the decision or award of such tribunal for the decision of the established courts of justice. The objective of arbitration is to achieve a fair resolution of disputes by an impartial tribunal without undesirable delay or expense and the parties are free to agree how their disputes are settled and intrusion by the courts should be limited. The nature of most ADR processes is non-adjudicatory whereas arbitration is an adjudicatory process and is similar to prosecution in that sense. However, since it is still an alternative to the traditional litigation process of dispute resolution conveyed before law courts established under the order of the state, arbitration finds its place in the spectators of what has been described as ADR In India also the availability of arbitration as a dispute resolution process in section 89 CPC indubitably confirms its status as an ADR device[3]( Economics: Principles in Action., 2003).


TYPES OF ARBITRATION

Domestic, Foreign, and International Arbitration: The term “Domestic Arbitration” indicates an arbitration that takes place in India[4] and the resultant arbitral award is estimated to be a domestic award[5]. “Foreign Arbitration” is arbitration which is governed at a place outside India and the resultant prize is characterized as a “foreign award”[6]. “International Arbitration” is arbitration where at least one of the parties involved is not a citizen of India, or is domiciled outside India, or is a company chartered outside India “Institutional Arbitration” is the arbitration administered by an established perennial arbitral institution[7]. There are various such institutions/ organizations and such arbitration may take place in India or outside India[8](India Code, 1996).

Institutional and ad hoc Arbitration

This is the one which offer amenities for the administration of arbitration and have their own set of rules for the conduct of arbitral proceedings[9] which are regulated and controlled by the institution from the stage of selection of arbitrator till the passing of the award. arbitration which is not ‘institutional’ is referred to as ad hoc arbitration(Shodhganga, n.d.).


ADVANTAGES AND MERITS OF ARBITRATION

PRIVACY AND CONFIDENTIALITY

The base for understanding the benefits of arbitration is prosecution since arbitration as an ADR device and litigation both are adjudicatory. Judicial proceedings in courts are administered in an open court in the watch of the prevailing public. Everything right from pleadings, testimony, actions to the final judgment is open and available for all. In contradiction, to judicial operations, arbitration is a solitary affair. Some parties favour having that their arguments concluded out of public gaze and the arbitration is a good option[10].

CONVENIENCE OF PARTIES AND FLEXIBILITY OF PROCEDURE

Arbitration is considered to be a closed-door adjudication where the general public is barred and therefore offers seclusion and confidentiality for those whose situations or wishes require a private adjudication. Confidentiality is, therefore, institutional preservation in arbitration. Another principal feature of arbitration is the satisfaction of the parties. In the judicial process, the parties have no authority over the proceedings and they have no say as regards the system, venue, and time of judicial procedures. The procedure is largely predestined, the venue is fixed and the time is controlled by the supervising judge. However, arbitration provisions to the satisfaction of the parties which is a very important benefit of arbitration. In arbitration, the parties are free to choose the venue and time of arbitration, the method governing arbitration, the arbitrators, etc. Further, as arbitration is consensual and is based on the structure of party sovereignty, the parties can choose the most suitable procedure[11]. The arbitral process is also very resilient unlike prosecution before national courts which is administered by detailed, complex[12], and time-consuming rules of system and evidence. the arbiter is not restricted by the Code of Civil Procedure, 1908 or the Indian Evidence Act, 1872(India Code, 1996).


The various regulatory bodies in the field of arbitration are:


ARBITRATION IN DELHI

Arbitration is widely resorted to in Delhi as a method of argument perseverance. It is one of the most common techniques of dispute perseverance in financial perplexities and there are numerous boulevards for arbitration in Delhi.


DELHI HIGH COURT ARBITRATION CENTRE (DAC)

The Delhi High Court Arbitration Centre (DAC) is a self-governing and acknowledged institution, providing standardized negotiation services, which has been recently authenticated by the Delhi High Court and works directly under the guidance of the Delhi High Court[13]. The DAC was created under the Charter of the Delhi High Court to secure fair, speedy, and economical justice to the defendants by embracing refuge to arbitration and for giving effect to the prerequisites of section 89 CPC. The charter moreover directs the DAC to ensure that the arbitration proceedings are economical and are resolved within a moderate time frame. The DAC provides all modern foundation facilities and has five arbitration halls each furnished with an accommodation capacity of 20 persons, various conference rooms for parties, and their delegates and chambers for arbitrators. The ASSOCHAM to let its members enjoy the fruits of speedy arbitration has also endorsed an MOU with the DAC(High court of delhi, 2010-2012).


An Arbitration Committee The DAC also has its own set of rules – the Delhi High Court Arbitration Centre Rules have been framed for the control of the arbitral procedures; the Delhi High Court Arbitration Centre Rules govern the circumstances concerning the fee owing for arbitration and the Delhi High Court Arbitration Centre Rules, 2010 govern the administration of the DAC[14]. The matter can be ascribed to arbitration by DAC under a treaty between the parties providing for the source of all future disputes under that contract to DAC or even by a separate agreement catering for the source of an existent dispute to DAC. Apart from that, the matter can also be related to DAC under section 89 CPC and even under sections 11, 8, and 9 of the Arbitration and Conciliation Act, 1996(Indian Kanoon, 2011). has also been established under the chairmanship of a Judge of the Delhi High Court to make judgments for the smooth and efficient functioning of the DAC and for making nominations to the panel of arbitrators.

INDIAN COUNCIL OF ARBITRATION (ICA)

The Indian Council of Arbitration (ICA) is also a premier arbitral institution in Delhi which was instituted in the year 1965. The ICA renders high-class infrastructure pieces of equipment for the treatment of institutional arbitration[15]. The ICA has also entered into collaboration contracts with various international permanent arbitral organizations including the International Chamber of Commerce (ICC), American Arbitration Association, etc. The ICA has framed laws known as the Rules of Arbitration of the Indian Council of Arbitration administering with the appointment of arbitrators, initiation, and administration of arbitral proceedings, confidentiality, etc. The rules also provide for fast track arbitration. The ICA has also framed ICA Maritime Arbitration Rules for the determination of maritime disputes. The ICA has also expressed an ICA Code of Conduct to be followed by the negotiation committee, arbitrators, parties, and their adviser and has also issued a set of guidelines for arbitrators and parties for the quick conduct of arbitration proceedings. The idea is to ensure speedy and unbiased arbitration proceedings.

The ICA has an arbitration organization constituting the Rules of Arbitration of the Indian Council of Arbitration and the President of ICA is the ex officio director of the arbitration committee. The ICA has a broad-based committee of more than 2000 arbitrators constituting of resigned judges, advocates. engineers, chartered accountants, experts, etc. The ICA also imposes a fixed charge as per rule 31 of the Rules of Arbitration of ICA based on the application amount[16].


The ICA Arbitration services are regularly employed by the parties. The ICA has administered more than 2000 arbitration cases and every year diverse cases are related to arbitration by ICA. Various business objects incorporate arbitration conditions in their contracts for the source of disputes to mediation by ICA(International Council, 2010-2011). Various services and PSUs have advocated the use of ICA arbitration conditions in their agreements.

THE INTERNATIONAL CENTRE FOR ALTERNATIVE DISPUTE RESOLUTION (ICADR)

The International Centre for Alternative Dispute Resolution (ICADR) with its office at Delhi provides quality pieces of equipment for the fortitude of disputes by arbitration as well as by fast-track arbitration. ICADR functions under the aegis of the Ministry of Law and Justice, Government of India and the Chief Justice of India is the sponsor of ICADR.


The ICADR has also expressed ICADR Arbitration Rules, 1996 dealing with the selection of arbitrators, initiation, and conduct of arbitral procedures, confidentiality, etc. The ICADR has its fixed record of arbitrators and regulatory fees imputable based on the claim amount along with other muddled charges(ICADR, 2003).


The matter can be related to arbitration by ICADR under an agreement between the parties rendering for the source of all future conflicts under that deal to institutional intervention by ICADR or even by a separate contract providing for the reference of a current dispute to arbitration by ICADR.


in some situations, even where the object is not related to institutional arbitration by ICADR, the arbiters on ICADR’s board are hired by various government authorities and PSUs for the execution of ad hoc arbitration. As per the ICADR, Annual Report, 2009-2010 the ICADR’s New Delhi centre accepted 38 lawsuits for arbitration. Furthermore, the negotiation exchanges at ICADR’s centre at New Delhi are frequently employed by the government departments, PSUs, and even individual parties for the demeanour of arbitration cases on payment of nominal fees[17](ICADR).


FICCI ARBITRATION AND CONCILIATION TRIBUNAL (FACT)

The Federation of Indian Chambers of Commerce and Industry (FICCI) has installed its arbitral organization namely the FICCI[18] Arbitration and Conciliation Tribunal (FACT) having its offices in New Delhi. The FACT was founded in the year 1952 and at that time it was known as the FICCI Tribunal of Arbitration (FTA) and was subsequently renamed as FACT[19](FICCI, 1927).

FACT provides types of equipment and assistance for the control of institutional arbitration. To resort to arbitration by FACT the parties need not have a preceding arbitration contract to refer their dispute to FACT and cases may be recorded on the point after mutual approval of the parties in writing. FACT also provides for FACT fast track procedure for arbitration for more rapid resolution of disputes[20].

Conclusion

Institutional arbitration is one of the probable solutions to the problem and an essential step can be that institutional arbitration slowly reinstates ad hoc arbitrations to a substantial extent and the remaining ad hoc arbitrations be properly and efficiently monitored to maintain the measures of the dispute resolution method. Various changeless arbitral institutions are prospering in Delhi, such as ICA, ICADR, LCIA, CIC, DAC, etc. which implement an element of the art foundation for the resolution of disputes through arbitration in a professional, unbiased and speedy manner.


Therefore, it can be concluded that the regulatory bodies in arbitration can be proved to be a boon.


References

[1]Ashwani Kumar Bansal, Arbitration and ADR 5 (Universal Law Publishing Co. Pvt. Ltd., Delhi, 2005). [2] Arbitrator is a private judge and arbitration is private adjudication. See Latha K., “The Need for the Proper Utilization of ADR Facilities in India”, XLIII ICA Arbitration Quarterly 18 (October – December 2008). [3] See Luke R. Nottage, “Is (International) Commercial Arbitration ADR?”, 20 The Arbitrator and Mediator 83 (2002), available at: http://papers.ssrn.com (last visited on 12.04.2012) [4] The provisions of Part I of the Arbitration and Conciliation Act, 1996 apply to such Arbitrations. See s. 2(2), Arbitration and Conciliation Act, 1996. [5] S. 2(7), Arbitration and Conciliation Act, 1996. [6] However only those foreign awards which are recognized by ss. 44 and 53, Arbitration and Conciliation Act, 1996, which in turn relate to the New York Convention for Recognition and Enforcement of Arbitral Awards, 1958 and Geneva Convention, 1937 respectively, can be enforced in India. [7] S. 2(1)(f), Arbitration and Conciliation Act, 1996 defines International Commercial Arbitration in a similar manner. [8] G.K. Kwatra, Arbitration & Conciliation Law of India 5 (Universal Law Publishing Co., Delhi, 7th Edition, 2008). [9]E.g. International Chamber of Commerce (ICC), London Court of International Arbitration (LCIA), Singapore International Arbitration Centre (SIAC), American Arbitration Association (AAA), Indian Council for Arbitration (ICA), FICCI Arbitration and Conciliation Tribunal (FACT), etc. [10] See Davit St. John Sutton, Judith Gill, Mathew Gearing (Eds.) Russel on Arbitration 11 (Sweet and Maxwell, London, 23rd Edn., 2007). [11] Davit St. John Sutton, Judith Gill, Mathew Gearing (Eds.) Russel on Arbitration 12 (Sweet and Maxwell, London, 23rd Edn., 2007). [12] Tarun Chatterjee, “Need for Speed: International Institutional Arbitration”, XLIII (4) ICA Arbitration Quarterly 1 (January-March, 2009); Arbitration embodies a trial process grounded on common sense, flexibility, and an ethic of problem-solving. See Thomas E. Carbonneau, “Arguments in Favor of Triumph of Arbitration”, 10 Cardozo J. Conflict Resol. 395 (2009). [13] DAC was inaugurated on 25.11.2009 by Justice K.G. Balakrishnan, Chief Justice of India and is housed in the premises of the Delhi High Court, Sher Shah Road, New Delhi. [14] Arbitration Committee consists of five Judges of the Delhi High Court, the Additional Solicitor General attached to the Delhi High Court, President or Vice-President of the Delhi High Court Bar Association, four advocates and the Coordinator of the DAC (who is a member of the Delhi Higher Judicial service) [15] The ICA has its office at Room No. 12, Federation House, Tansen Marg, New Delhi. [16] 79 E.g. In arbitration where the amount in dispute does not exceed Rs. 5 lacs, the ICA charges arbitrator’s fees of Rs. 60,000/- per arbitrator, administrative fees of Rs. 45000/- and special facilitation fee of Rs. 5000/- per day and other misc. expenses [17] ICADR, Annual Report (2009-2010) [18] The Federation of Indian Chambers of Commerce and Industry (FICCI) is the largest and oldest apex business organization of Indian business. [19] The FACT has its headquarters at Federation House, Tansen Marg, New Delhi. [20]E.g. In arbitration where the amount in dispute does not exceed Rs. 5 lacs, the FACT charges arbitrator’s fees of Rs. 30,000/- per arbitrator, administrative fees of Rs. 15000/- and special facilitation fee of Rs. 2500/- per day and other misc. expenses

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