Unit-21

Arbitration
Characteristics of arbitration:
1. Alternative method:
Arbitration is one of the alternative method of settlement disputes which
arise between two business firm and business person. It solves problems
or disputes relating to civil matter (like property, money, personal rights
and dignity etc) in judicial manner.
2. Involvement of person:
Arbitration is that method of settlement of disputes where two or more
than two non court persons are involve. The persons who involved in
settlement are also appointed by concern parties.
3. Sattelment of dispute:
Arbitration settled disputes relating to civil matter in judicial manner
with judicial assumption and principles.
4. Decision:
Arbitration takes appropriate decision for solving disputes between two
parties. It takes decision in judicial manner which should accept by
concerned parties.
5. Arbitration process:
Procedure of solving disputes is developed by concerned parties with
their mutual consent.
6. Subject matters:
Arbitration only settled disputes related with civil matter like property,
money, personal rights and dignity etc.Disputes relating to matter which
are purely criminal in nature can’t be referred to arbitration.

7. Ad-hoc(temporary) nature:
Arbitration is ad-hoc in nature. It becomes dissolution after taking
appropriate decision for solving disputes between two parties.
Significance of arbitration:
1. Speedy:
Arbitration provides the best alternative disputes resolution process in
speedy manner. They (arbitrators) need not to follow the lengthy
process of litigation instead, they may fix the procedures to be followed
by themselves in consultations of the parties of dispute. Arbitration act,
2055 has made a mandatory that within 120 days arbitrators have to
deliver their decision.
2. Simple procedures:
There is no rigidity in formulation of process of arbitration. It can be
fixed by arbitrators with consultating of the parties of disputes. This
makes disputes settlement procedures easy, simple & faster.
3. Less expensive:
Simple procedures & Litigation makes the case less costly. It avoids
incurred future expenses by taking appropriate decision in judicial
manner, which makes the case less costly for concerned parties.
4. Secrecy or privacy can be maintained:
Secrecy or privacy is very important for the trade & commerce. so, that
arbitration hearing of the dispute in close bench which helps to maintain
private & also it not open the secrecy to other persons not concerned to
the dispute.

5. Expertised services:
The parties of dispute in arbitration are free and open to select a person
as a arbitrator who has knowledge in the area of the particular dispute,
which provides effectiveness in disputes settlement. So, that it is
important for business point of view.
6.Easy in execution of the award:
Arbitration makes easy in execution of the award by taking agreed
agreement from disputing parties that they will follow the decision
given by them whatsoever may it be this consent makes the execution of
award possible & success.
7. Convienient for international business disputes:
Arbitration settled international business disputes by following the
common rules which is widely accepted in the world by the commercial
community. It makes convenient to the business person & firms of
different nations & societies.