Posted on: August 18, 2020 Posted by: admin Comments: 0

Author : Shreyasi Dutta, BBA.LLB(H), Law Student


I can imagine no society which does not embody some method of arbitration.”               

                                                                                                                                -Herbert Read

Alternative Dispute Resolution (ADR) provides a way to resolve business related disputes without the need of any costly litigation procedures. A very common type of ADR is arbitration. Arbitration is more a very formal type of ADR that involves a court process with an independent arbitrator who always listen to both sides or oth parties of a dispute before deliverig a decision. This arbitration process is always executed just like a court, usually with one arbitrator or with a panel of three arbitrators. The arbitrators always decide on procedural as well as evidentiary matters. Disclosure of such documents will occasionally be required and there may be documentary evidences, but the procedures are normally  shorter and less formal than the  litigation procedures. The arbitrator delivers a decision on a case, based on the evidences that are presented by the parties. Arbitration is always a voluntary procedure, so both the parties must have agreed to go to arbitration; they must also agree in advance that they will comply with the arbitrator’s decision.


Even the Sun has black spots, the coin has two different sides and the beautiful roses have thorns, and the Arbitration system also has some flaws. The advantages of the arbitration system are: The speed and the process. The speed of this process and the informal nature of the arbitration process is said to be one of the most important reasons why many organizations opt for arbitration instead of litigation procedures. In many cases it has been witnessed that arbitration can be a shorter process and, if lawyers are not needed in this procedure than  it can be less expensive. The two parties in  the arbitration have full liberty over the selection of their arbitrator, as compared to a court case in which the selection of the judges and jury members are out of the hands of the both parties. Also, arbitration is always a less formal process, which speeds up the process. The arbitration hearings always held in  private and the results are not part of the public record.The Oregon Judicial Department says[1], “Sometimes if the parties want, arbitrators can decide things that judges are not allowed to decide.”

PRIVACY AND CONFIDENTIALITY: In a contradistinction to other judicial proceedings, arbitration is a more private affair. Usually some parties prefer to have their disputes out of public gaze and for them arbitration is always a good option[2]. Arbitration is a  private meeting award where the general subjects are excluded and therefore it provides privacy and privileges for those whose circumstances require a private award. Confidentiality is, therefore, a great security in the process of arbitration.

CONVENIENCE OF PARTIES AND FLEXIBILITY OF PROCEDURE: Another most important  characteristic of arbitration is that the both sides are free to select the place and time of the arbitration, the procedure that controls the arbitration, the arbitrators etc. Further as arbitration is a mutual process and is based on the erection of party autonomy, the parties can pick the most suitable process of arbitration in convenience of parties[3].

NEUTRALITY: In the process of arbitration, the parties can refer their disputes to a unprejudiced forum. This is often fetching to both the parties, especially if they are cautious of referring disputes to the other party’s local courts. Arbitration also allows the parties to make sure that the structure of the tribunal, as well as the seat of arbitration and the location of hearings, are unbaised[4].

FINALITY: The chances to appeal or summons of an arbitration award are more restricted than those related to court judgements. Therefore, the parties do not  caught up in lengthy appeals. Of course, this is not benefit if the arbitral tribunal does not decide in your favor.

Some short comings to this procedure are: One drawback to the process is the absence of formal process. This fault means that you depend on the ability and experience of the arbitrator to categorize evidence, more than a judge or jury. No questionings or statements are taken, and no discovery process is included in the arbitration procedures. The informal process and the normal binding nature of the process also attract misanthropes. If you are a party to a binding arbitration and you wish to disagree with the arbitrator’s decision, you may not be able to do so till there is ground to believe that the arbitrator was biased or prejudiced.


Now Arbitration has become a widespread ADR procedure in the entire world. Arbitration is an adjudication process, and is one of the top ADR processes as it serves as an effective replacement for litigation. Arbitration has various merits, like procedural pliability and the soverignty of the parties, which make it a preferred procedure for the resolution of business disputes[5], though, the greatest virtue of arbitration is the motive associated with arbitration awards. Arbitration was evolved and outlined as an effective substitute to litigation to let the parties to judge their disputes by private judges of their choice in a rapid and worthwhile manner. However, arbitration, as it has been working in Delhi in the previous times, has not met its assumptions and it is disappointing with that undue hold ups and growing expenses[6]. Immoral practices and repeatations of judicial disruption are reprovingly hampering the growth of arbitration as an effective ADR procedure. This is in fact the nemesis of various arbitration proceedings today. Instant remedial measures are guaranteed to save the trustworthiness of the arbitration procedures and there is an instant need to make arbitration more fruitful, faster, cheaper and more appropriate so that it can flourish as an ADR mechanism. The common thing often heard is that arbitration costs less. Many companies hire advocates to assist them with arbitration, and sometimes the arbitrators do it for free. In a research by Corporate Counsel reveals that in 19 cases arbitration was cheaper than litigation, and the standard time for arbitration was two months shorter than in comparison to litigation cases[7]. Arbitration has slowly become a field of high competition: competition between arbitration seats, between advocates and arbitrators;  between apposite events; and, of course, between arbitration organizations. All arbitration organizations attempt to promote their services and their rules in the world wide marketplace, and the commercial and legal sections to which these services are promoted and will naturally choose between one organisation over another. Such choices would rely not only on the ability and competence of the organisation, but also on its attainability and level of ease with arbitration under its guidence. Competition between reliable and valid service providers has contributed to the evolve of arbitration and also, to the rule of law. The main arbitration organizations also collaborate in many areas with the aim of expanding the best conditions for arbitration as a authentic form of dispute resolution[8]. They will refer the dispute to this easy, rapid, appropriate and cost-effective process that will save you from monotonous and lengthy court procedures. Arbitration awards are generally privileged only to the parties. They do not give hike to any binding precedent for other parties. In cases where a finishing and binded by laws ruling is required on a matter of law, litigation will always be the foremost option.


At all events, arbitration is more rational, just, and humane than the resort to the sword”.

                                                                                                                                   Richard Cobden

Arbitration has slowly become a field of high competition: competition between arbitration seats, between lawyers and arbitrators; between valid events; and, of course, between arbitration organizations. All arbitration organizations seek to promote their services and their regulations in the same global market area, and the business and legal categories to which these services are encouraged . Such a choice would depend only on the ability,competence, attainability and validation of the organizations. Competition between reliale providers has benefited to the development of arbitration and, therefore in the regulations of law. In many areas the arbitration organizations  are aiming to develop with the the best conditions for arbitration as a bonafide form of dispute resolution.



[2] Davit St. John Sutton, Judith Gill, Mathew Gearing (Eds.) Russel on Arbitration 11 (Sweet and Maxwell, London, 23rd Edn., 2007).

[3] Davit St. John Sutton, Judith Gill, Mathew Gearing (Eds.) Russel on Arbitration 12 (Sweet and Maxwell, London, 23rd Edn., 2007).


[5] 7 The principle of minimal  judicial interference may not work well in India at this stage. See Amrita Sanghi, “ADR: Commercial Practicalities and Growing Importance”, Halsbury Law Monthly, May 2009, available at:

[6] Department related Parliamentary Standing Committee (Rajya Sabha), Ninth Report On Personnel, Law and Justice on the Arbitration and Conciliation (Amendment) Bill, 2003, presented to the Rajya Sabha on 4th August 2005 referring to B.S. Patil, The Law of Arbitration, 3rd edn., 1996

[7] Ruma Pal, “Arbitrations and Arbitrators”, 1(1) Dispute Resolutions (Nani Palkhivala Arbitration Centre Quarterly) 3 (September 2010).


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