Arbitration and Its

Procedures
• dispute resolution. Settle the dispute beyond the
formal process of litigation is called ADR. Plaintiff files
the case in the court to acquire justice. But the formal
litigation process of the Court is so expensive, time
consuming and lengthy. Furthermore, execution of
decision process is very difficult. Therefore most of the
people didn't want to file the case in the Court and
eventually access to justice will be far for vulnerable
people. They will be compelled to tolerate injustice
and slogan of zero tolerance will be limited within the
slogan.
• Litigation in court become so costly, more time
consuming, complex and long procedure, more
adversarial and it has gradually undermined
the people's faith. The Courts were not in
position to bear the entire burden of modern
demands of people in settling the disputes
giving appropriate justice and justice should be
resolved by ADR procedure which provides
procedural flexibility, saving of valuable time
• Justice delayed is justice denied" this
expression is true and for resolving this
problem ADR mechanism is needed. The
ultimate goal of ADR system is to provide
proper justice. A dispute is a problem to be
solved together rather than a combat to be
won which possible by ADR system.
• ADR programmes can not be a substitute for a
formal judicial system. ADR programmes are
instruments for application of equity, rather than
the rule of law and as such con not be expected to
establish legal precedent or implement changes in
legal and social norms. But it does not to minimize
the role of court specially the superior court, play
in the promotion of role of law.
• me and mo9ney and appropriate justice.
• ADR system can increase access to justice for
social groups that are not adequately of fairly
served by judicial system. ADR may be called:
Social legal process, distinct from judicial
process, informal procedure in the consent of
parties, non-litigation procedure of dispute
resolution, non-adversarial process, and
collective name of the entire dispute settling
method outside the Courtroom.
• The primary objective of ADR movement is avoidance of
vexation (irritation), expense and delay. It promotes the
idea of access to justice for all. It provides cheap, simple,
quick and accessible justice. The aim of ADR is to
encourage parties in conflict to arrive of compromise
solution with the assistance of a neutral person.
• It is felt that ADR process is an essential element of social
peace, social solidarity and harmony. It is participatory
justice which depends on parties' satisfaction. The
freedom of the parties to litigation is not affected by ADR
proceedings.
• ADR can be used with or without lawyer. ADR procedures help
in reduction of the workload of the court and thereby help
them to focus on the cases which ought to be decided by
court.
• ADR permit to choose neutrals who are specialist in the
subject matters of dispute. ADR process is consensual, private
and flexible. It helps to settle the dispute in short period. It
helps to make win-win situation both dispute parties. It helps
to reduce cost of litigation.
• It is able to improve access to justice for all sectors. It
enhances parties satisfaction. The decision made by ADR will
be implemented immediately. It will maintain secrecy.
• ADR is not applied all kind of dispute. There are some limitations. So J.
Efforn has said that " ADR is a limited activity for limited purpose in a
limited time and with limited recourse". Some limitations are as follows:
• The issue of public policy is not the subject matter of ADR.
• The constitutional question or issue is not the subject matter of ADR.
• Generally, criminal cases can not be a subject matter of ADR.
• The process of ADR is not adopted for any special dispute, for solution of
which the special court is constituted.
• The dispute which has to interpret legal question is not the subject matter
of ADR.
• ADR techniques can be used where appropriate and what form is
appropriate depends upon the facts and circumstances of each case.
Techniques of ADR are as follows:
 ARBITRATION
• Arbitration is a method of dispute resolution involving one
or more neutral third parties who are usually agreed to by
the disputing and whose decision is binding. An arbitrator
is a natural person who decides the dispute fairly and
neutrally and his/her decision is known as an award.
• Halsbury Laws of England “The process by which a dispute
or difference between two or more parties as to their
mutual legal rights and liabilities is referred to and
determined judicially and with binding effect by the
application of law by one or more persons instead by a
court law “.
 WHAT IS ARBITRATION ?
• Primary form of alternative dispute resolution,

• Arbitration is often confused with mediation, which is an informal

• Arbitration is more formal than Mediation

• Dispute is resolved with the help of arbitrator who is a neutral third

• Decisions made via arbitration are binding to the parties.

• Process is less technical and more procedurally flexible.

• The parties have a greater degree of control over the timing and

parameters of the case.

• Arbitrators often have more experience about the specific subject

matter of a dispute than judges, who hear all kinds of cases.

arbitrate their disputes rather than sue.

• Arbitration agreements may include clauses that control the selection of arbitrator(s),

the format of the hearings that take place, the procedural and evidentiary rules that

will be used, the controlling law, and the venue where the arbitration will take place.

• Arbitrators do not have to be lawyers, parties can select arbitrators from other fields

that they consider more suitable for the resolution of the dispute.
 PROCEDURE ADMINISTERED BY
ARBITRATION ACT 2055
• 2(a) “Agreement” means a written agreement reached between the concerned
parties for a settlement through arbitration of any dispute
concerning any specific legal issue that has arisen or may arise in the future under
a contract or otherwise.
• Explanation: For the purpose of this clause, the concerned parties shall be
deemed to have entered into a written agreement in case any
of the following documents exists:
(1) Any contract containing provision for arbitration or any separate agreement
signed in that connection.
(2) Letter, telex, telegram or telefax message, or any other similar at time message
exchanged through telecommunication media whose records can be maintained
in a written form, between the concerned parties which provide for referring
their disputes to arbitration.
(3) In case any party has presented a claim for referring any dispute to arbitration
and the objection to that claim submitted by the party objecting to that claim
without rejecting the proposal for referring the dispute to arbitration.
 QUALIFICATION OF ARBITRATOR According
to arbitration Act
• 10. Qualifications of Arbitrators: The following persons shall not be
• disqualified for appointment as arbitrators: -
• (a) Disqualified for entering into contracts as per prevailing laws.
• (b) Punished by a court on criminal charges involving moral turpitude.
• (c) Become insolvent or been declared bankrupt.
• (d) Any personal interest in the dispute which has to be settled
through
• arbitration.
• (e) Not having any specific qualification specified in the agreement for
• becoming eligible for appointment as an arbitrator.
REMOVAL OF ARBITRATOR According to Act
11. Removed of Arbitrators: (1) The condition and procedure for removal
of an arbitrator shall be as mentioned in the agreement.
(2) In case the condition and procedure has not been mentioned in
the agreement pursuant to Sub-section (1), any party may, in any of the
following circumstances, submit an application to the arbitrator requesting
for permission to remove an arbitrator within 15 days from the date of

his/her appointment or from the date when the party learns that the
concerned arbitrator has failed to act:
(a) In case any arbitrator is clearly seen to have shown a
bias toward or discriminated against any party instead
of working in an impartial manner;
(b) In case any arbitrator engages in improper conduct or
commits fraud in the course of arbitration;
(c) In case any arbitrator frequently commits mistakes or
irregularities in the course of arbitration;
(d) In case any arbitrator does not attend arbitration
meetings or refuses to take part in arbitration
proceedings for more than three times without
furnishing satisfactory reasons with the objective of
prolonging or delaying the arbitration proceedings in
an improper manner;
e) In case any arbitrator takes any action which is
opposed to the principles or rules of natural justice; or
(f) In case any arbitrator is found to be lacking the
necessary qualifications, or to have ceased to be
qualified.
(3) Upon received an application pursuant to Sub-section (2), the
arbitrator whose removal has been demanded does not relinquish his/her
post voluntarily, or other party does not agree with grounds on which
his/her removal , the arbitrator must take a decision on the matter within 30
days from the date of application.

(4) A complain may be filed before the Appellate Court against the
decision pursuant to Sub-section (3), and the decision of the Appellate
Court shall be final.
 OFFICE OF ARBITRATOR
• The “office” of the arbitrator under the Arbitration
Act is to be located at the place chosen by the
parties. If the parties fail to agree, then the office
shall be at the place, specified by the arbitrator in
the light of all the circumstances. However, (unless
the parties have made other arrangement), the
arbitrator may record the statements of witnesses,
obtain opinion of experts and inspect any
document, object or place at any other
appropriate place (section 12).
 Arbitration Act 2055
• Submission of Claims, Counter-Claims, objections
or Rejoinders (section 14)
• Circumstances in which Arbitration Proceedings shall
Terminate or Continue (section 15)
• Power of the Arbitrator to Determine Jurisdiction (section 16)
• Procedure to be Adopted by Arbitrators(section 17)
• Substantive Law to be followed by Arbitrators (section 18)
• Arbitration Hearings to be held in Camera (section 19)
 Limitation for various pleadings and claims
• Arbitration Act also lays down time limits for filing the various
categories of claims mentioned above. Subject to an agreement
between the parties laying down a different time limit, these time
limits are as under:
- to be filed within three months from the date when the dispute
arose or when the arbitrator is appointed (whichever is later] ;
– to be filed within thirty days from the date of receipt of the claim ;
– same time limit as is mentioned in (b) above ;
– to counter, claim to be filed within 15 days from date on which
counter claim is filed ;
The arbitrator is empowered to extend the time limit for not more
than seven days (section 14).