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Kinds of Arbitration

Kinds of Arbitration 

Arbitration is a mechanism in which a dispute is resolved by a impartial third party whose decision is final and binding upon the parties. The procedure of arbitration is as follow:-

  • Filing of a case
  • Selection of an arbitrator 
  • Preliminary hearing and scheduling order 
  • Discovery process 
  • Hearing / arbitration hearing
  • Post arbitration briefs
  • Final arbitration award 

Why Arbitration not litigation ?

Litigation is time taking and less flexible as compared to Arbitration . In litigation the relations of parties get sour . In arbitration , the parties have the ability to select the decider , whereas the court litigation doesnot.

Kinds of ArbitrationThe kinds of arbitration is divided on two basis

  • Jurisdiction
  • Procedure and Rules 

On the basis of Jurisdiction

  • Domestic Arbitration : In the Indian Arbitration and Concillation (Amendment) Bill , 2003 , the definition of the term domestic Arbitration was given as :

Dosmetic Arbitration means a arbitration relating to a dispute arising out of legal relationship whether contractual or not where none of the parties is :

An individual who is a nationality of or habitually resident in any country other than India ; or

A body corporate which is incorporated in any country other than India ; or 

An association a body of individuals whose central management and control is exercised in any country other than India , or 

The government of a foreign country.

Hence , in a domestic arbitration the arbitration takes place in India.

The subject matter of contract is in India . And the merits of the dispute and procedure of arbitration is also ground by the Indian law.

International Commercial Arbitration 

According to the clause (f) of subsection 1 of section 2 of the 1996 Act, international commerical ararbitration as arbitration relating to the disputes arising out of legal relationship whether contractual a not considered as commencement under the law in force in India and where atleast one of the parties is : 

  • An individual who is natural of , or habitually resident in or any country other than India.
  • A corporate body which is incorporated in any country other than India.
  • A company or an association or a body of individual whose central management and control is exercised in any country other India . 
  • The government of foreign country.

International Arbitration

Whern arbitration take place within India or outside India and the subject matter of dispute is foreign in origin.

On the basis of procedure and rules 

Institutional Arbitration 

In an institutional arbitration , the arbitration agreement may specify that in case of dispute or differences arising between the parties they will be referred to a particular institution .

Ad hoc Arbitration

In ad hoc arbitration the arbitration is arranged by the party themselves.

The ad hoc arbitration can be either domestic, international but not institutional .

The parties in this frame their own rules of procedure.

Difference between Institutional arbitration and Adhoc Arbitration

Institutional Arbitration

  • It is more expensive
  • Fixed timeliners for the conduct of an arbitration.
  • The institutional arbitration have their own rules .
  • It is flexible in case of international arbitration.

Ad hoc Arbitration

  • It is less expensive
  • Timeliners are flexible as per the requirement of parties and arbitrator.
  • Parties may control the process 
  • It is not flexible in case of international arbitration.

 Fast Track Arbitration

In this the parties either before or at time of appointment of Arbitral Tribunal , may agree in writing to resolve their dispute in fast track mode.

The arbitration can be taken either on the basis of written pleading or oral hearings.

The award under fast track proceeding shal be passed within a period of 6 months from the date of reference to the Arbitral Tribunal.

 

 

 

  • Introduction
  • Kinds of arbitration
  • Difference between institutional and adhoc arbitration

BY : Riya Sehgal

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