DIVISION OF ARBITRATION ON THE BASIS OF RULES AND PROCEDURES
Arbitration is a form of alternative dispute resolution, wherein the disputants resolve their disputes outside the court. The dispute is decided by one or more persons who are known as the arbitrators. Arbitrators are either appointed by the parties or by the Indian Council of Arbitration.
Arbitration can be subdivided into various kinds on the basis of jurisdiction and on the basis of the rules and procedures followed. This article deals with the division of different kinds of arbitration on the basis of procedures and rules.
There are three kinds of arbitration that are recognized in India on the basis of rules and procedures followed.
- Institutional Arbitration- In this type, a specialized institution is appointed for the purpose of administering the arbitration process. While framing the arbitration agreement the parties may specify that disputes among the parties have to be resolved in accordance with the rules of a particular arbitral institution. If any disputes arise, the parties shall submit their respective issues to the arbitral institution. Subsequently, the arbitration institution appoints a panel who acts as the arbitrator. This type of arbitration is efficient because the institution has the expertise and requisite knowledge for the same. The arbitral institution has its own set of rules for the purpose of administering the arbitral procedure, this ensures that there shall be no dispute between the parties regarding the rules of the procedure.
- Ad -Hoc Arbitration- On the contrary to institutional arbitration, there is ad hoc arbitration. In this type, the arbitration procedure is administered by the rules decided upon by the disputants. In case no rules are decided upon by the parties, then the proceedings shall be administered by the rules of the arbitration tribunal. In this process, each party appoints an arbitrator, and both the arbitrators then appoint a presiding arbitrator to decide upon the issues relating to the dispute. Generally, retired judges of the High Court and the Supreme Court are appointed as presiding arbitrators. An ad-hoc arbitration can also be turned into an institutional arbitration if the disputants agree to do so. The major drawback of this procedure is that the retired Judges of the Supreme Court and the High Court follow the stringent procedures that are followed in the Court of law. This defeats the whole purpose of arbitration since it sometimes takes more than a year for the resolution of a dispute.
- Fast Track Arbitration- This process was introduced in India by the Arbitration and Conciliation (Amendment) Act, 2015 to expedite the process of arbitration in India. In this type, the proceedings should complete within a period of 6 months and there is no provision for oral proceedings, all submissions have to be made in written form. It is a very cost-effective procedure that consumes the limited time of the parties involved.
Each process of arbitration has its own set of advantages and drawbacks. But it is very essential for the disputants to examine the dispute and then select the procedure that is most suitable for the resolution of a dispute through arbitration.