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Unit_4_Arbitration

Arbitration is a legally binding alternative dispute resolution method governed by the Arbitration and Conciliation Act, 1996 in India, offering advantages like speed, cost-effectiveness, and confidentiality. It involves a neutral arbitrator and requires a written agreement to arbitrate, with provisions for the selection and removal of arbitrators. Commonly used in construction contracts, arbitration addresses various disputes such as delays and payment issues, often necessitating specialized knowledge.

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1 views

Unit_4_Arbitration

Arbitration is a legally binding alternative dispute resolution method governed by the Arbitration and Conciliation Act, 1996 in India, offering advantages like speed, cost-effectiveness, and confidentiality. It involves a neutral arbitrator and requires a written agreement to arbitrate, with provisions for the selection and removal of arbitrators. Commonly used in construction contracts, arbitration addresses various disputes such as delays and payment issues, often necessitating specialized knowledge.

Uploaded by

dayadur32
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Unit 4: Arbitration

1. Introduction

Arbitration is an alternative dispute resolution (ADR) method where disputes are settled outside the court by a neutral

third party (arbitrator). It is legally binding and governed in India by the Arbitration and Conciliation Act, 1996 (amended

2015, 2019, 2021). Advantages include being faster, cost-effective, confidential, and less formal.

2. Types of Dispute Resolution

- Litigation: Dispute resolution through courts.

- Arbitration: Binding resolution by an arbitrator.

- Conciliation: Non-binding; conciliator helps parties settle.

- Mediation: Neutral third-party facilitates voluntary agreement.

- Negotiation: Direct discussion between parties to settle disputes.

3. Essentials of Arbitration

- Agreement to arbitrate must be in writing.

- Dispute should be capable of being resolved through arbitration.

- Arbitrator must be impartial and independent.

- Award is enforceable by law.

4. Selection and Appointment of Arbitrator

- Parties can choose their arbitrator(s).

- Sole arbitrator: Mutually agreed.

- Three arbitrators: Each party appoints one; the two appoint the third.

- Courts can appoint if parties fail to do so (Section 11).

5. Powers and Duties of Arbitrator

Powers:

- Determine procedures

- Issue interim measures


Unit 4: Arbitration

- Summon witnesses and evidence

Duties:

- Remain impartial and fair

- Conduct proceedings efficiently

- Render reasoned award

6. Removal of Arbitrator by Court

Grounds for removal (Section 14 & 15):

- Inability to perform duties

- Bias or lack of independence

- Undue delay in proceedings

7. Misconduct of Arbitrator

Types:

- Procedural misconduct (e.g., not giving hearing opportunity)

- Moral misconduct (e.g., bias, corruption)

Consequences: Award can be set aside; arbitrator may be removed.

8. Grounds for Setting Aside an Award

Under Section 34 of the Act:

- Incapacity of party

- Invalid arbitration agreement

- Party not given proper notice

- Award deals with matters beyond the scope

- Conflict with public policy

9. Arbitration in Construction Contracts

Common due to complex nature and frequent disputes.


Unit 4: Arbitration

Disputes include delay in work, payment issues, defective work, etc.

Specialized arbitrators with technical knowledge preferred.

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