Parties to dispute often choose arbitration instead of litigation in courts because arbitration is speedy as compared to the delay in courtroom proceedings and also because it is less expensive. An arbitrator, like a judge carefully peruses the evidence and arguments of both the parties and finally presents his decision by way of an award.
Duty to act fairly
Duty to act fairly is surely the first and foremost function of an arbitrator. He must act in a just and fair manner to both the parties and within the hearings he must not showcase or exhibit any favour towards one party over the opposite and must avoid doing anything for one party which he cannot do for the opposite. Showing favours to one party at the cost of the opposite in matters handled by him would be frowned upon by the Courts.
Adherence to the principles of natural justice
An arbitrator must act keeping in mind the principles of natural justice. It’s now well settled that an arbitrator isn't bound by the technical and strict rules of evidence which are founded on fundamental principles of justice and public policy. However, in arbitral proceedings, there must be adherence to justice fairness and equity.
Hearing in absence of a party
An arbitrator would be guilty of misconduct if he's charged with any information having been obtained from one side which wasn't disclosed to the opposite. Such an information could be oral or in writing. it's with this aspect in mind that the Legislature provided in Section 24(3) of the Arbitration and Conciliation Act that “All statements, documents or other information supplied to, or applications made to the arbitral tribunal by one party shall be communicated to the opposite party, and any expert report or evidentiary document on which the arbitral tribunal may rely in making its decision shall be communicated to the parties”.
Failure to contemplate vital documents
The well-settled rule of law is that an arbitrator would misconduct the proceedings if he ignores important documents and evidence pertinent to reach a just decision. Even if the department, the parties didn't present those documents to the arbitrator, it absolutely was incumbent upon him to get hold of all the pertinent documents for arriving at a fair decision.
Arbitrator must act within submission
The eventual goal of arbitration is to settle all disputes between the parties and to avoid any further litigation.
Arbitrator cannot delegate his functions
In Russell on Arbitration, 20th Ed., page 228, it's been stated as under: “One who has an authority to do an act for other must execute it himself, and can't transfer it to another; for this, being a trust and confidence reposed within the party, can't be assigned to a stranger, whose ability and integrity weren't so well thought of by him for whom the act was to be done”.
An arbitrators’ role is similar to that of a Court’s Judge. An arbitrator must encourage communication in a collaborative manner and must ensure to avoid any act which might give an impression of prejudice against either party. He must try to ensure that the parties do not lose confidence in the process.