Meaning

The dictionary meaning of Arbitration is hearing and determining a dispute between the parties by a
person or persons chosen by the parties. It is an alternative to litigation in courts and is
advantageous as it provides flexibility and confidentiality. According to section 2 (1)(a) of Arbitration
and conciliation act 1996 "Arbitration" means any arbitration whether or not administered by
permanent arbitral institutions.

The arbitration act of 1940 did not contain the definition of the term "Arbitration".

The word arbitration as defined in the present act connotes the same meaning as contained in article
2(a) of the model Law of UNCITRAL.

Definition:

According to Nacham of Breslov arbitration is the justice blended with charity.

According to Black's Law Dictionary, arbitration means a method of resolving disputes which includes
two parties and neutral third party whose decision is binding on both parties.

In an English judgement named Collins vs. Collins (1858) 28 LJCh184:53 ER916 gave a wide definition
of the concept of Arbitration which reads as follows :-

An arbitration is a reference to the decision of one or more persons either with or without an umpire
a particular matter in difference between parties. It was further observes by the Court that
proceedings are structured for dispute resolution wherein executives of the parties to the dispute
meets in presence of a neutral advisor and on hearing both the sides and considering the facts and
merits of the dispute an attempt is made for voluntary settlement.

According to Byrne's law dictionary:

The term "arbitration includes practically every question which might be deterred to arbitration. This
under the English law, arbitration means the settlement of disputes by the decisions of one or more
person’s called arbitrator.

The procedure for arbitration involves the following steps:

Arbitration Agreement:

Before a dispute arises, the parties must have a valid arbitration agreement in place. This agreement
may be part of a contract, a separate agreement, or a clause in a contract that specifies that any
disputes will be resolved through arbitration instead of going to court.

Selection of Arbitrators:

The parties involved in the dispute, as per the arbitration agreement, select the arbitrator(s). In some
cases, the agreement may specify a particular arbitration institution or organization that will appoint
the arbitrator(s).

Initial Filings:

The party initiating the arbitration, known as the claimant, files a Notice of Arbitration, detailing the
dispute's nature, facts, and legal claims. The respondent, the other party, responds to the claim in a
timely manner.
Preliminary Conference:

The arbitrator(s) may hold a preliminary conference to discuss the procedural aspects of the
arbitration, including timelines, discovery procedures, and any preliminary issues that need to be
addressed.

Discovery (Optional):

Depending on the arbitration agreement and the applicable laws, the parties may engage in a limited
form of discovery, such as requesting documents and information from each other.Estate planning
services

Hearing:

The arbitration hearing is the main stage of the process, where both parties present their cases. Each
party has the opportunity to present witnesses, documents, and other evidence to support their
position. The arbitrator(s) may ask questions and seek clarification during the hearing.

Closing Arguments:

After the presentation of evidence, both parties are usually allowed to make closing arguments,
summarizing their positions and emphasizing the key points of their case.

Deliberation and Award:

After the hearing and closing arguments, the arbitrator(s) deliberate and reach a decision, known as
the arbitration award. The award is a written decision outlining the arbitrator(s)' findings,
conclusions, and any remedies or damages awarded to the prevailing party.

Enforcement of the Award:

In many jurisdictions, the arbitration award is final and binding. To enforce the award, the prevailing
party may need to seek confirmation from a court. Conversely, the losing party may challenge the
award in court under limited grounds provided by law.

It's essential to note that the arbitration procedure can be adapted based on the specific arbitration
agreement, the rules of the chosen arbitration institution (if applicable), and the complexity of the
dispute. The process can be faster and more flexible compared to traditional court litigation, making
it an attractive option for resolving certain types of disputes. However, as with any legal process,
parties involved in arbitration are encouraged to seek legal advice to understand their rights,
obligations, and potential outcomes.

Kinds of Arbitration

In arbitration a dispute is submitted to the arbitral tribunal and not to a regular civil court or
otherwise. The arbitral tribunal must give a decision on the dispute and this decision is thus binding
on the parties in the dispute since they have no grounds to appeal.

When contrasted with the traditional approach of a judicial proceeding which ordinarily happens in a
Court; and has to go through judicial proceeding which can save a lot of time for the parties.

A few types of Arbitrations in India on the basis of Jurisdiction

Domestic Arbitration
Domestic arbitration is that type of arbitration, which happens in India, wherein both parties must be
Indians and the conflict has to be decided in accordance with the substantive law of India. The term a
domestic arbitration has not been defined in the Arbitration and Conciliation Act of 1996. However
when reading Section 2 (2) (7) of theAct 1996 together, it is implied that €˜domestic arbitration
means an arbitration in which the arbitral proceedings must necessarily be held in India, and
according to Indian substantive and procedural law, and the cause of action for the dispute has
completely arisen in India, orin the event that the parties are subject to Indian jurisdiction. Legal
services

International Arbitration

When arbitration happens within India or outside India containing elements which are foreign in
origin in relation to the parties or the subject of the dispute, it is called as International Arbitration.
The law applicable can be Indian or foreign depending upon the facts and circumstances of the case
and the contract in this regard between the respective parties. To fulfill the definition of International
Arbitration it is sufficient if any one of the parties to the dispute is domiciled outside India or if the
subject matter of dispute is abroad.

International Commercial Arbitration

International Commercial Arbitration is defined as the substitution of many burning questions for a
smouldering one. NaniPalkhiwala has stated that International Commercial Arbitration is a 1987
Honda car, which will take you to the same destination with far greater speed, higher efficiency and
dramatically less fuel consumption[ii] International Arbitration is considered to becommercial if it
related to disputes arising out of a legal relationships irrespective of their contractual nature and are
considered as commercial under the law in force in India and where at least one of the parties is-

A national of, or habitual resident in, any country other than India or

A body corporate which has to be incorporated in any foreign country, or

An association or a body of individuals whose core management and control in a country which is
not India or

the government of a country other an India. In International Commercial Arbitration the arbitral
tribunal is bound to decide the conflict according to the rules of law chosen by the parties as
applicable to the substance of the dispute; any designation by the parties of the law or legal system
of a given country can be interpreted, unless it has been expressed otherwise, one which directly
refers to the substantive law of that country and does not refer to its conflict of laws rules.

Legal services

Types of arbitrations that are primarily recognized in India on the basis of procedure and rules:

Institutional arbitration

Ad hoc arbitration

Fast track arbitration

Institutional arbitration

When an arbitral Institution conducts arbitration, it is called Institutional Arbitration. The parties
have the choice of specifying, in the arbitration agreement, to refer the differences to be determined
in accordance with the rules of as elected arbitral Institution. One or more arbitrators can be
appointed from a pre-selected panel by the governing body of the institution or the disputants
themselves can select their panel but it has to be restricted to the limited panel. Arbitration and
Conciliation Act 1996 provides that where in Part I except section 28, the parties are free to
determine a certain issue, that liberty encompasses the right the parties have to authorize any
person including an institution, to determine that issue. The Act also explicitly provides that where
Part I €˜refers to the fact that the parties have agreed or that they may agree, or in any other
way refers to an agreement of the parties, that agreement shall include any arbitration rules referred
to in that agreement.

Ad-hoc arbitration

If the parties agree among themselves and arrange for arbitration, it is called Ad hoc Arbitration
without having an institutional proceeding. It can either be domestic, international or foreign
arbitration. Russell on Arbitration says that, The expression Ad Hoc, as in Ad Hoc Arbitrationor Ad
Hoc Submission is used in two quite different senses:

An agreement to refer an existing dispute, and/or an agreement to refer either future or existing
disputes to arbitration without an arbitration institution being specified to supervise the
proceedings, or at least to supply the procedural rules for the arbitration. This second sense is more
common in international arbitration.

Ad Hoc Arbitration means that the arbitration should not be conducted according to the rules of an
arbitral institution. Since, parties do not have an obligation to submit their arbitration to the rules of
an arbitral institution; they are free to state their own rules of procedure. The geographical
juridiction of Ad hoc Arbitration is of essence, since most of the issues concerning arbitration will be
resolved in accordance with the national law of the seat of arbitration.

Fast track arbitration

Even the other processes of arbitration can be lengthy and tedious and thus this process of
arbitration works like a remedy to the issue of time. Fast track arbitration is a method, which is time
dependent in the provision of the arbitration and conciliation act. Its procedure is established in a
way that it has abandoned all the methods, which consume time, and uphold the simplicity which is
the originally the prime purpose of such arbitration.

Cause title

IN THE MATTER OF ARBITRATION BETWEEN

VARUN (Contractor)

(Claimant)

AND

RAJEEV (Client)

(Respondent)