ARBITRATION Arbitration is a procedure in which a dispute is submitted, by agreement of the parties, to one or more arbitrators who make a binding

g decision on the dispute. In choosing arbitration, the parties opt for a private dispute resolution procedure instead of going to court. It is the one of the oldest method of settling civil disputes between two or more persons by reference to the dispute to an independent and impartial third person called arbitrator. Definition: Arbitration is a domestic forum. It is a forum other than court of law for determination of disputes and differences, after hearing both sides in judicial manner.

CHARACTERISTICS OF ARBRITRATION

Arbitration is consensual

The parties choose the arbitrator(s) Arbitration is neutral Arbitration is a confidential procedure The decision of the arbitral tribunal is final and easy to enforce The Indian Council of Arbitration established in 1965 is the apex arbitral organisation at the national level.

 Its Rules of Arbitration have recently been revised based on the Arbitration and Conciliation Act, 1996.

These Rules are of international standard and they provide a guarantee wished for by the trade for quick and just settlement of the dispute.

The Council has entered into arbitration service agreements with important foreign arbitral institutions in more than 30 countries to administer abitrations under their rules if arbitration is held in India PANEL It maintains a panel of arbitrators consisting of: Retd. Judges, Advocates, Shipping Experts, Chartered accountants, Chartered Engineers, Businessmen, Foreign Nationals and Executives having specialization in more than 20 fields.

Difference between Arbitration and Court Arbitration By Agreement Freedom to Choose Your own Arbitrator Venue Language Procedure to be followed Time Frame for Delivery of Award Privacy is Maintained No Stigma Attached Court Proceedings By Law No such freedom

No Privacy Stigma is Attached

Speedier - Civil Time Consuming - Civil Procedure Code & Procedure Code & Evidence Act do not Evidence Act Strictly apply Apply Costly Less Expensive Judgements are Award is final and binding. Grounds for appealable. setting aside award have been reduced considerably. No Bitterness After Bitterness may remain in loosing party. Award

Arbitrators Fee (Revised on 1st November, 2002) The Arbitrators fee (for each arbitrator) will be fixed separately with regard to the amount in dispute in each case, as under and will be shared equally by both the parties. Upto Rs. 5,00,000/Rs. 20,000/-

From Rs. 5,00,001/- Rs. 20,000/- plus Rs. 900/to per lac of the amount Rs. 10,00,000/exceeding Rs. 5,00,000 From Rs. 10,00,001/- to Rs. 100,00,000/From Rs. 100,00,001/- to Rs. 500,00,000/Rs. 24,500/- plus Rs. 700/per lac of the amount exceeding Rs. 10,00,000/Rs. 87,500/- plus Rs. 25000/- per crore of the amount exceeding Rs. 100,00,000/-

From Rs. 500,00,001 to Rs. 100,000,000

Rs. 1,87500 /- plus Rs. 15625/- per crore of the amount exceeding Rs. 500,00,000/-

Over Rs. 100,000,000

Rs. 2,65,625/- plus Rs. 6250/- per crore of the amount exceeding Rs. 100,000,000/-

ESSENTIALS OF ARBITRATION AGREEMENT : It must be in writing. It must have all the essential elements of valid contract. It must be to refer a dispute, present or future, between the parties to arbitration. It may be in the form of an arbitration clause in a contract or in the form of a separate agreement. The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement if the contract is in writing and the reference is such as to make that arbitration clause part of the contract. Advantages of Arbitration Binding dispute settlement mechanism

Arbitration affords the parties a choice of the law & a choice of the judges that they do want & more important to reject the law which and to reject the particular judge whom they do not want.

Technical matter : appropriate special qualifications of the Arbitrator. Speedier than a court case saving in the costs unwanted publicity can be avoided Convenience of the parties as to time and place

Arb. Can view subject at any reasonable time.

DISADVANTAGES OF ARBITRATION The arbitrator may be incompetent Injustice may result from the informality of the procedure Conduct of arbitrations by permanent institutions the International Chamber of Commerce's International Court of Arbitration, World Intellectual Property Organization (WIPO) Arbitration Center, American Arbitration Association (AAA), China International Economic and Trade Arbitration Commission, Indian Council for Arbitration, or the International Center for Settlement of Investment Disputes (ICSD),

 International Chamber of Commerce (ICC), located in Paris. The American Arbitration Association (AAA) London Court of International Arbitration Arbitration Institute of the Stockholm Chamber of Commerce. Appointment of an Arbitrator Section -11: (1) person of any nationality (2) parties to agree on a procedure for appointment of Arb. Failing agreement as in above -- the two Arb shall appoint a third Arb who shall act as the presiding Arb---Umpire. 30 days Sec. 16--may rule on its own jurisdiction Process of Arbitration Very Simple under the Rules of Arbitration of IMC(Indian Merchants Chamber)

Submit to IMC a written request for arbitration and send a statement of claim along with all supporting documents relating to the claim. IMC will send the claimant and the defendant a copy of Rules of Arbitration along with a list of Arbitrators on its panel and ask both the parties to appoint by mutual consent an Arbitrator from amongst the Panel of Arbitrators of IMC. Simultaneously the defendant will be asked to submit his defence statement with all the supporting documents on which he wants to rely. If the parties fail to appoint Arbitrator or Arbitrators by mutual consent, IMC proceeds to appoint an Arbitrator or Arbitrators as the case may be

depending upon terms of the contract between the parties or the amount of claim as the case may be. Fees payable towards Administration and Arbitrators are also collected in advance either fully or partially depending upon the circumstances. Before Arbitrator is appointed all preliminary work is completed by IMC. Hence once Arbitrator is appointed he straight away commences arbitration proceedings. Preliminary work like receiving statement of claim from Claimant, defence statement from defendant counterclaim if any reply to counter claim, documents on which parties want to rely, etc. is completed by IMC. Before commencing proceedings or even during proceedings Arbitrator also explores possibilities of settlement between the parties. If no settlement is reached then Depending upon amount of claim counter claim if any number of witness to be examined, cross-examination etc.attempt is made to finish proceedings within 6 months from the date of appointment of the Arbitrator with the co-operation from both the disputing parties. The Award given by the Arbitrator is final and binding on the parties and can be enforced like a decree of the court.

Content of Arb. Award Arbitral Award - Decision of Arbitral Tribunal is termed as 'Arbitral Award'. Arbitrator can decide the dispute ex aequo et bono (In justice and in good faith) if both the parties expressly authorize him to do so. The decision of Arbitral Tribunal will be by majority. The arbitral award

shall be in writing and signed by the members of the tribunal. The award must be in writing and signed by the members of Arbitral Tribunal. It must state the reasons for the award unless the parties have agreed that no reason for the award is to be given. The award should be dated and place where it is made should be mentioned. Copy of award should be given to each party. Tribunal can make interim award also. Sec. 31--- (1) shall be made in writing (2) signed by the Arb. Tribunal (3) shall state the reasons , unless (a) parties have agreed no reasons be given (b) award under agreed terms under Sec. 30 (4) state date and place (5) signed copy delivered to each party (6) interim award (7)(a) payment of money: include in the sum for which award is made ---interest to paid from date on which cause of action arose & the date on which award is made (b) provision of 18% interest from the date of award to the date of payment------unless the award otherwise directs. Award does not transfer a property : parties are directed to execute conveyance or other wise make a transfer of the property in dispute. POWERS OF ARBITRATOR : Administrative Assistance Jurisdiction Interim measures Place of arbitration and language Hearing and written proceedings Termination of proceedings Appointment of experts Court assistance in taking evidence Correction of errors in ,and interpretation of, awards DUTIES OF ARBITRATORS :

First duties After receiving notice of appoinment the arbitrator should see that his appointment in order.If it is not it is to be put in order. Enter into the reference and make an award with in a prescribed time. Act judicially and impartially Shall have no interest in the subject matter of the dispute Disclose in writing any circumstances likely to give rise to justifiable doubts as to his independence or impartiallty Shall not misconduct himself or the proceedings in any way Encourage settlement of dispute by mediation or conciliation or other proceeding Shall observe the rules of natural justice Shall give a final award on the matters refer to him , unless he is empowered to make several awards MATTERS WHICH MAY BE REFERRED REFFERED : 1.Determination of damages in breach of contract 2.Question of validity of marriage ( maintenance to wife) 3.Question of law (separation) Matters of personal or private rights of the parties 4. Disputes regarding compliment and dignity 5. Time barred claims MATTERS WHICH MAY NOT BE REFERRED Matrimonial matters (divorce)

Testamentary matters lie (Validity of Will) Insolvency matters Matters relating to public charities and charitable trusts Lunacy proceedings Matters relating to the guardianship of a minor Matters of criminal natures Execution proceedings