SCHEME OF ARBITRATION
Arbitration is Process of resolving disputes between parties to an Agreement / Contract mostly commercial in nature, without going into lengthy and time consuming process of Civil court. Arbitration is preferred mode of Settlement for Commercial Disputes amongst big corporate Houses like Reliance, TATA, Indian Oil Corporation or Any Dispute related to allotment of Tender by any Government Authority like National Highway authority or tender of any large construction etc. Now a days importance of Arbitration had increased multi-fold even with Mid-sized Corporations and companies and they are widely using it increasingly to resolve their dispute due to easiness and effectiveness of Arbitration process.
HOW IT STARTS
The very basis of Arbitration proceedings is Valid and legal Agreement / Contract in writing entered between the parties by signing the same in presence of marginal witnesses, which contain “ARBITRATION CLAUSE” in itself or any other separate agreement between the parties, which may provide that if any dispute arose amongst the parties to agreement, they would resolve the dispute through Arbitration proceedings to be conducted under Arbitration and Conciliation Act 1996.
WHAT TO DO IF DISPUTE AROSE
There are two situations, Depending on Agreement / Contract entered between the parties –
PRE-DETERMINED OR PRE – NAMED ARBITRATOR
1) In agreement signed between the parties, they had already agreed between themselves that in event of any dispute arose between them, a Pre-determined or Pre – named, person would act as Arbitrator. In this situation,
A) The party, who wanted to raise an dispute, would made a request letter to Pre – determined / Pre – named person that a dispute had arose with the other party of agreement and we request you to initiate Arbitration proceedings.
B) Then, the Arbitrator, if he accept to act as Arbitrator then he would direct both parties to present before himself on date fixed to file any Claim Statement by either party.
C) On the date fixed both parties would appear and present their claim Statement and process of Arbitration would began.
d) Circumstanced Exist and gave birth Justifiable doubts as to impartiality of the arbitrator and further more if had failed to disclose any relation or any related interest with any party
APPOINTMENT OF ARBITRATOR BY CONCERNED CHIEF JUSTICE
This situation arose, when Arbitrator is not named in contract between parties, then the party, who wished to raise the dispute by appointment of Arbitrator, had to approach the Chief Justice of Concerned High court, for appointment of Arbitrator under section 11 of Arbitration and Conciliation Act 1996. Like for example if a dispute arose between two parties and they had entered in to agreement in Haryana then they need to approach chief Justice of Punjab and Haryana High court, Chandigarh for appointment of Arbitrator and decision of Chief Justice, regarding this would be final. As the Arbitrator, Act like a private judge and both parties reposed their faith in him so it is very important that Arbitrator must be fair and accurate in proceedings of Arbitration. There are only two grounds available to parties under this act to challenge the appointment of an arbitrator by Chief Justice and these rights came in picture, only after the appointment of Arbitrator –
TYPES OF DISPUTES CAN BE RESOLVED IN ARBITRATION?
Almost any type of legal dispute can be settled in arbitration, including those arising under commercial contracts, but now a day Scope of Arbitration is increasing and Agreement relating to lease / rent, Agreement to sell, sale agreement, any other Tri-parte Agreement, Partnership agreement, Construction agreement are also coming within the ambit of Arbitration.
For example- if Arbitration clause is there in rent agreement, dispute related to tenancy can be heard and decide by an Arbitrator, as result of this, Rent matters, which took years to reach any Judicial Conclusion would be decided Expeditiously and since it is very limited grounds are available to Challenge Arbitration Award the rent matter, which would have remained pending for years would be solved very Quickly.
ROLE OF CIVIL COURT
though the scheme of Arbitration and Conciliation Act 1996 is such that it tends to minimize the role of Civil Court but still on some count Role of Civil court (District Judge level) is very important. As provided in section 9 of The Arbitration and Conciliation Act, 1996. Interim relief may be sought by a party before or during arbitration proceeding or anytime after the making of the award. The need for approaching Civil Court for interim reliefs may arose under various Circumstances for example as following
A) Preservation, interim custody or sale of any goods which are the subject matter of the arbitration agreement
B) Securing the amount in dispute in the Arbitration or for any unseen contingency,
C) The detention, preservation or inspection of any property or thing which is the subject-matter of the dispute in arbitration
D) Authorizing any samples to be taken or any observation to be made
E) For purpose of recording of evidence; interim injunction or the
appointment of a receiver.
F) Such other interim measure of protection as may appear to the court to be
just and convenient.
This section is very important and as it does not leave a person remedy less in case of any arbitrator is acting under exceed authority or under Biased approach towards one party to arbitration. This interim relief has to be asked from the principal civil court of original Jurisdiction in a District (Concerned District Judge) and includes the High Court in exercise of its ordinary original civil Jurisdiction, having Jurisdiction to decide the questions forming the subject matter of the Arbitration if the same had been the subject matter of a Civil suit.