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Advantages of Arbitration over Litigation

Advantages of Arbitration over Litigation


Arbitration is mostly referred to as contradictory to litigation. Under the process of Arbitration the use of a neutral third party or panel of third parties known as Arbitrator(s) is hired to settle the dispute between parties in conflict, it is a process of resolving the dispute outside the court. The arbitrators listen to the arguments made by the parties in conflict and on the basis of that they make a unbiased decision beneficial for both the parties.

Generally people prefer arbitration over litigation because it is less expensive, quicker, secure and offers more privacy to the parties. And among its different benefits most distinguishable benefit of arbitration over litigation is its cost and time efficacy.

Many business owners and construction industry entities prefer Arbitration as dispute resolution process because of their reputation and goodwill in the market. Arbitration is also  suitable in international cases where parties cannot agree on the appropriate jurisdiction. It is also preferred in cases where one or both of the parties aspire to have a final decision with no probability of further appeal. However, in some cases where matter is too complicated to be sorted out in one meeting or there are more than two parties involved  arbitration should not be opted as a measure to seek resolution.

Advantages of Arbitration:

  1. Arbitration is considered to be more flexible than Litigation. Laws related to the process of litigation are more complex as compared to arbitration, litigation must follow law of civil court, it involves following CPR rule book whereas Arbitration rules are much more simple and small in number. In arbitration there is no code of procedure, it is agreed by the parties, they can agree and settle to whatever they want.
  2. Arbitration can provide better quality justice than many courts of the country as they already overloaded with cases. Arbitration in international disputes also provide better quality decision as compared to domestic courts.
  3. Arbitration as compared to litigation is less time consuming as well as less expensive. Arbitration aims at providing expeditious resolution than the normal court proceedings, Similarly, it is less costly than the court proceedings.
  4. Arbitrators tend to provide greater level of expertise as compared to a judge, because Arbitrators are appointed from the bunch of the professionals who have specialized knowledge of particular trade or business thereby boosting confidence and trust of businessmen in proceedings and the resulting award -

- likely in insurance disputes where arbitrators chosen in that field.

-rather than more general judges.

  1. An Arbitration award is ultimate and permanent , and there are very limited chances of further appeal, even if the arbitrator makes a error of fact or mistake of law. International Commercial arbitration is also unbiased plus arbitration also guarantees privacy and confidentiality of the matter in dispute and unlike court proceedings does not disclose the identity of the parties involved in it.

Though arbitration has many advantages, it is wise to consider all of the options when preparing to begin arbitration. Knowing the major differences between arbitration and litigation can be a valuable asset and a great time and money saver.

  • Meaning of Arbitration
  • In which cases Arbitration suits the most
  • Advantages of Arbitration

BY : Vani Shrivastava

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