Arbitration

 when the parties agree to have their disputes

decided with the mediation of a third person, but
with all the formality of a judicial adjudication
that may be, speaking broadly, called arbitration.
 Arbitration, therefore, means the submission by
two or more parties of their disputes to the
judgement of a third person, called the
‘arbitrator’, and who is to decide the controversy
in a judicial manner.
 Essential elements of Arbitration
a. There must be disputes between the parties.
b. Disputes has already arisen or will arise in the
future.
c. The reference should be made to impartial
person(arbitrator) or group of
persons(arbitrators) other than the court of
competent jurisdiction.
d. The arbitrator should act judicially while
deciding (awarding) the disputes.
 Cont..
e. The decision (award) given by the arbitrator
will be final and will be binding upon the
parties who has referred the disputes.
Merits or importance of Arbitration
1. Arbitration process is quick than court process.
2. It is more feasible.
3. It is less expensive.
4. It is confidential.
5. Convenient in International Trade and Business.
6. More expertise service.
7. Finality of the Decision.
 Procedure to be adopted
• any procedure as mentioned in the agreement
or
• in absence of such procedure in accordance
with this Act itself.
 Appointment of Arbitrators

• Arbitrators shall be appointed in the following

ways:
• By parties
• By the court
 Appointment by the parties

• The number of the arbitrators shall be as

mentioned in the agreement or in the absence
of such provision, normally there shall be
three arbitrators.
• If the number of arbitrators fixed in the
agreement is even, then the arbitrators so
appointed shall appoint one more arbitrator.
 Arbitrators

• Unless there is a separate provision in the

agreement, the process of appointing
arbitrators shall be initiated within three
months from the day the difference is arisen.
• If the name of the arbitrator is mentioned in
the agreement, then the same person shall be
the arbitrator.
 Arbitrators

• Unless there is any other provision in the

agreement, both the parties shall appoint one
arbitrator each and those appointed arbitrators
shall appoint another arbitrator who shall be
the main arbitrator and work accordingly.
 Appointment of Arbitrators by the Court

• the High court for the appointment of

arbitrators
– If the arbitrators could not be appointed
through the process mentioned in the
agreement.
– If nothing is mentioned in the agreement about
the appointment of the arbitrators.
 Appointment by the court
• any person as arbitrator proposed by the parties to the
dispute by giving notice to all the concerned parties
and getting approval from them.
• Lacking consensus, then the court itself shall appoint
any person it thinks fit for the purpose within sixty
days from the date of application filed.
• The decision of the court shall be final.
 Arbitral Award

• A judgment or final decision given in writing by

arbitrator or arbitrators on all the matters of dispute
referred to arbitration is called award.
• The essentials of an award:
– The award must be in writing.
– It must be signed
– It must be certain and final.
 Award
• It must be well reasoned
• It must dispose off all the differences
submitted to arbitration.
• Must not decide matters not within the
agreement. An award outside the agreement is
void
 Time for award

• Unless the arbitration agreement provides

contrary, generally the award shall be
delivered within 120 days from the date of
submission of all the documents to the
arbitrators. (Section 24)
• Or unless the arbitration agreement provides
contrary, the award in writing shall be
delivered within 30 days from the day the
order for the conclusion of hearing is passed.
Section 17 (7)
 Decision of arbitrators (Section 25)

– The decision of the majority shall be final.

– Unless the arbitration agreement provides
contrary, if the decisions of all the arbitrators are
completely different and the majority decision is
not achieved, then, in that case the decision of
the Umpire or main arbitrator shall be final.
Decision of arbitrators (Section 25)
– The arbitrators shall sign the award.
– Any arbitrator may differ with the majority
decision and express it.
 Award must be informed (Section 28)

• Award must be read to the parties

• copies of the award must be given to all the
concerned parties separately.
• If any party is absent or the party refuses to
accept the copy of the award then, a notice
must be given to the concerned party stating
such facts along with the copy of the award.
 Award cannot be altered

• Arbitrators cannot again give another award

on the same disputed matter except on the
order of the High court under section 30.
• But some minor or insignificant corrections
like mathematical, printing, typing can be
done. Section 29
 Award may be invalidated

• Dissatisfied party may file an application for

the invalidation of such award to the High
court within 45 days from the date of hearing
of such decision or receipt of the notice of
such decision. The arbitrators and the other
concerned party must be informed about it.
 Revocation of Arbitrator’s Authority

1. Disputes parties with consent of each other.

2. If biasness is shown.
3. Improper action or fraud act of Arbitrator’s.
4. Mistake
5. Unnecessary delay in the Arbitration
Proceeding.
6. Action against Natural justice.
7. Lack of desired qualification