Fast Track and Appellate Arbitration
Domestic arbitration can be carried out by different methods. This article will discuss appellate or two-tier arbitration and fast track arbitration or the use of expedited arbitration procedures.
What is appellate arbitration? Is it permissible?
‘Appellate arbitration’ or ’two-tier arbitration’ is a dispute resolution mechanism wherein if either party is in disagreement with the award of the first arbitration, the aggrieved party can appeal the dispute to a second arbitration. This type of arbitration mechanism is rare and not in practice under normal circumstances.
The Arbitration and Conciliation Act, 1996 does not place any express or implied prohibition on the practice of appellate arbitration. As an addition, the Supreme Court of India, while discussing the issue of appellate arbitration, in the decision of M/s Centrotrade Minerals & Metal Inc. v. Hindustan Copper Ltd has made it evidently clear that appellate arbitration mechanism is not contrary to Indian law or public policy. However, since this is not amply clarified in the statute, there are no guidelines or procedures on how it is carried out.
Nevertheless, with the acceptance of appellate arbitration by the Indian system a long-standing apprehension in the market has been addressed; the apprehension being the inability to challenge an award passed by a tribunal.
Fast track or expedited arbitration procedures:
The Arbitration and Conciliation Amendment Act 2015 has been passed (which was preceded by an Ordinance in October 2015), amending the Act. The ‘fast track procedure’ as stated in Section 29B enumerates that parties to a dispute can by writing agree to conduct the arbitration under a fast track procedure. However, this has to be done before the constitution of the arbitration tribunal. In order to implement the fast track method of resolving a dispute through arbitration, the arbitration agreement must contain such a provision i.e. the arbitration agreement must contain the consent of the parties to utilize fast track procedure. Accordingly, the tribunal must comply with the timelines stipulated under the Act in this regard.
This is achieved through certain strict practices such as:
- the reliance on written submissions only
- not relying on oral submissions for the purpose of the hearings.
Hence, unless the parties otherwise make a request for oral hearing or if the arbitral tribunal considers it necessary to have an oral hearing, the arbitral tribunal shall decide the dispute on the basis of written pleadings, documents and submissions filed by the parties without any oral hearing. The award in fast track procedure has to be made within six months from the date of the arbitral tribunal enters reference.
The above discussed process is similar to expedited arbitration mechanisms under various institutional rules (eg. SIAC, ICC). However, the major difference herein is that under the Act, adoption of such an expedited procedure is solely based on consent of the parties as opposed to the ad-hoc rules of an institution, wherein the designated authority may determine upon application by a single party after hearing both the parties whether expedited procedures should be followed or not (as seen in Rule 5 of the SIAC Arbitration Rules). The standard to be used in order to determine whether a case should be heard as a fast track matter depends on the institution itself. However, in order to validate such an action the institution must hear the parties in order to determine whether a fast track procedure could be a satisfactory method of resolving the dispute at hand.
With use of expedited arbitration procedures, the actual duration required in the completion of the proceedings has reduced dramatically. In fast track arbitration, the dispute at can be resolved within a period of 6 (six) months.
This mode of resolution is usually used to address relatively straightforward claims that do not require extensive expert examination to address the contentions (of law and fact) that are being raised.
This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being.