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Types of Arbitration

There are two types of arbitration: voluntary arbitration and compulsory arbitration. Voluntary arbitration involves parties willingly agreeing to use an arbitrator to settle a dispute. The arbitrator's decision is binding. Compulsory arbitration involves an arbitrator making a non-binding decision in a dispute where one party was not willing to use arbitration. Either party can reject the ruling and request a trial. The key differences are that voluntary arbitration uses binding decisions agreed to by both parties, while compulsory arbitration results in non-binding decisions where one party did not consent to arbitration.

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1K views

Types of Arbitration

There are two types of arbitration: voluntary arbitration and compulsory arbitration. Voluntary arbitration involves parties willingly agreeing to use an arbitrator to settle a dispute. The arbitrator's decision is binding. Compulsory arbitration involves an arbitrator making a non-binding decision in a dispute where one party was not willing to use arbitration. Either party can reject the ruling and request a trial. The key differences are that voluntary arbitration uses binding decisions agreed to by both parties, while compulsory arbitration results in non-binding decisions where one party did not consent to arbitration.

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rahulravi4u
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© © All Rights Reserved
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There are two types of Arbitration:

1. Voluntary Arbitration
2. Compulsory Arbitration
Voluntary Arbitration is a binding, adversarial dispute resolution process in which
the disputing parties choose one or more arbitrators to hear their dispute and to
render a final decision or award after an expedited hearing
Voluntary arbitration implies that the two contending parties, unable to compromise
their differences by themselves or with the help of mediator or conciliator, agree to
submit the conflict/ dispute to an impartial authority, whose decisions they are
ready to accept. In other words, under voluntary arbitration the parties to the
dispute can and do they refer voluntarily and dispute to arbitration before it is
referred for adjudication. This type of reference is known as voluntary reference,
for the parties themselves volunteer to come to a settlement though an arbitration
machinery.
The essential elements in voluntary arbitration are :
The voluntary submission of dispute to an arbitrator.
The subsequent attendance of witnesses and investigations.
The enforcement of an award may not be necessary and binding because there is
no compulsion.
Voluntary arbitration may be specially needed for disputes arising under
agreements.
Compulsory Arbitration is a non-binding, adversarial dispute resolution process in
which one or more arbitrators hear arguments, weigh evidence and issue a nonbinding judgment on the merits after an expedited hearing. The arbitrator's decision
addresses only the disputed legal issues and applies legal standards. Either party
may reject the ruling and request a trial de novo in court.
Compulsory arbitration is one where the parties are required to accept arbitration
without any willingness on their part. When one of the parties to an industrial
dispute feels aggrieved by an act of the other, it may apply to the appropriate
government to refer the dispute to adjudication machinery. Such reference of a
dispute is known as compulsory or involuntary reference, because reference in
such circumstances does not depend on the sweet will of either the contending
parties or any party to the dispute. It is entirely the discretion of the appropriate
govt. based on the question of existing dispute, or on the apprehension that
industrial dispute will emerge in particular establishment.
Under compulsory arbitration, the parties are forced to arbitration by the state

when:
The parties fail to arrive at a settlement by a voluntary method
When there is a national emergency which requires that the wheels of production
should not be obstructed by frequent work-stoppages
The country is passing through a grave economic crisis
There is a grave public dissatisfaction with the existing industrial relations
Public interest and the working conditions have to be safeguarded and regulated
by the state.
Compulsory arbitration leaves no scope for strikes and lock-outs; it deprives both
the parties of their very important and fundamental rights.

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