“Differences we shall always have but we must settle them all, whether religious or other, by arbitration.” – Mahatma Gandhi

What is Arbitration

The dictionary meaning of ‘arbitration’ is the process of solving an argument between  parties by helping them to agree to an acceptable solution.

Arbitration is an important part of the Alternative Dispute Resolution Mechanism that benefits the parties who want to avoid the normal lengthy legal recourse to the local courts for the settlement of disputes.

Arbitration is a legal mechanism for dispute settlement between two agreeable parties to appoint an ‘arbitrator’ to give a binding solution on the dispute. 

In this way, arbitration helps to save time and resources by allowing the settlement of disputes outside the court.

What Are The Stages of Arbitration

Following are the stages of arbitration:

1. Arbitration Clause – An agreement or a clause specifically stating that if a dispute arises between the parties they will resolve it through the process of arbitration.
2. Arbitration notice – In case a dispute has arisen and the party has opted to follow the procedure of arbitration then the party against whom the default has been committed will send an arbitration notice  to invoke the arbitration process steps between the parties.
3. Appointment of Arbitrator– The parties in the arbitration agreement or clause mutually decide and mention the name of the concerned arbitrator who will resolve the dispute. In case of failure, the parties shall move to the Court and request to appoint an arbitrator.
4. Statement of Claim– Next step in an arbitration proceeding in India is to draft a statement of claim. Statement of claim contains the details of the dispute between the parties, events which lead to the dispute and the compensation that has been claimed from the defaulting party. The other party can file a statement of counterclaim along with a reply to the statement of claim.
5. Hearing of Parties – Arbitral tribunal will hear both the parties and address the issues along with supporting evidence.
6. Award – After hearing the parties, the arbitral tribunal will pass the decision. The decision of the tribunal is known as the ‘Award’ and is binding on the parties. However, an appeal against the award can be filed before the High Court.
7. Execution of Award – Once the award has been passed by the tribunal it has to be executed. The party in whose favour the award has been passed has to file for execution or enforcement of the award with the help of a good arbitration lawyer.

Advantages of Arbitration

1. Arbitration in reality is more flexible than Litigation. In comparison to arbitration the laws related to the process of litigation are more complex . Litigation must follow law of civil court which involves following CPR rule book whereas in Arbitration there is no specific code of procedure. Here the parties can agree and settle to whatever and however they want.
2. Arbitration can provide better decisions wherein all the stakeholders to the decision are satisfied.
3. Arbitration aims at providing expeditious resolution than normal court proceedings and is much more economical.
4. Arbitrators are mostly professionals having specialized knowledge of trade or business, thereby boosting the confidence and trust of the people in the proceedings.
5. Arbitration also guarantees privacy and confidentiality of the matter in dispute unlike court proceedings.

We at masterbrains.co.in have empaneled arbitrators who are retired judges or professionals with a rich understanding of business, who are committed to excellence and to providing affordable services. For more enquiries contact us at +91-8595867402.