Source: https://www.scribd.com/document/220456502/Institutional-Arbitration-In-India
Timestamp: 2019-04-25 23:47:21+00:00

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A Project on Institutional Arbitration in India. With reference to Indian institutions.
Aims and Objectives: The aim of the project is to present a detailed study of the topic “Telangana: A Constitutional Perspective” through reports, suggestions and different writings. The aim has been to come to a conclusion very much indigenous.
Scope and Limitations: Though the topic “Telangana: A Constitutional Perspective” is an immense project and pages can be written over the topic but because of certain restrictions and limitations we might not have dealt with the topic in great detail.
Method of Writing and Mode of Citation: The method of writing followed in the course of this research paper is primarily analytical. The researcher has followed Uniform method of citation throughout the course of this research paper.
pointed to the faulty construction of the clause.4 Based upon these notions. as it contained only an agreement to arbitrate without providing important details relating to selection of the arbitrator. at 38. The same prohibition is made to the Athenians and their allies as to the Lacedaemonians and their allies.C. arbitration needed to be institutionalized to make it an automatic and continuing part of the political landscape in which the Greek city-states existed. JACKSON H. it has been noted that “[c]ustom could propel the use of arbitration to settle disputes between city-states on an ad-hoc basis. & Marc A. Jr. the tribunal. noting that this agreement lasted only six years. INTERNATIONAL ARBITRATION FROM ATHENS TO LOCARNO 157 (1929).1 Although arbitration was not considered the standard method by which to resolve such differences. but if there should arise a difference between them they will remit its solution to a procedure according to a method upon which they will come to an agreement. there is some evidence that parties from different cities agreed to arbitrate disputes either by mutual consent or by agreeing to a boilerplate pre-dispute clause providing for such a mechanism. 1994. J. LeForestier.” The lesson to be learned from this piece of history is that institutions do make a Henry T. 40. Significantly. and the suspicions each side had of the other. The authors recognized that the agreement’s “sloppy construction” was only one factor of many that led to the end of the Pease of Nicias. RALSTON. or the procedure.. Id. RESOL. Other factors included the lack of desire for peace by either Athens or Sparta. Id.2 An example of such a clause appeared as early as 421 B.Introduction Arbitration of disputes between international parties dates from the days of ancient Greece.3 One author. in an agreement between Athens and Sparta. known as the Pease of Nicias: It shall not be permissible for the Lacedaemonians and their allies to make war upon the Athenians and their allies or to inflict upon them damage in any manner under any pretext whatsoever.'* Sloppy construction of that agreement has been proffered as a contributing factor to the demise of the Greek city-states. But for permanency’s sake. one wonders whether the fate of the ancient Greeks would have been different had they sought the assistance of a neutral. 2 . DISP. King. third-party institution for guidance and support throughout both the drafting stages of the arbitration agreement and the administration of the ensuing procedure. 4 Id. 1 2 3 Arbitration in Ancient Greece. Sept.
Id. A large part of this article is devoted to the role of the institution and its positive impact on the dispute resolution procedure. Of further importance to this topic are the major players—some of the significant institutions. arbitration. the article compares institutional arbitration to unadministered. N. at A-14. In addition.Y. On a general level. 5 See Matthew L. Finally. 11. arbitration administered and supervised by an institution can only benefit the participating parties. in an effort to acknowledge and respond to the perceived needs of parties who select arbitration as the method by which to resolve their disputes. TIMES.5 The focus of this article is how institutional arbitration specifically addresses parties’ needs. A contemporary instance of institutional contributions to business and political issues is the airline strike in November 1993 in which President Clinton asked the parties to submit the dispute to arbitration and continue airline flights in the interim. Id. Wald. including a few newly created specialty organizations. the article focuses on particular ways institutions may seek to improve the process in the future for party participants. case law. Essential to this discussion is a preliminary description of the standard conventions. Attendants at American Get Pay Raise of 17% by 97.difference. or ad hoc. 1995. all of which provide support for the recognition and enforcement of arbitration awards. 3 . Oct. and statutory provisions. The matter was amicably concluded under the auspices of the American Arbitration Association.
and most importantly. International Commercial Disputes].6 As a result. In addition. GENERAL 4 .Growth of International Arbitration An increase in international trade and investment. Parties to international agreements enjoy many advantages in pursuing arbitration to resolve their disputes. Hoellering. an effective treaty network guaranteeing the enforcement of arbitral agreements and awards. including privacy of the proceedings. Finally. Arbitration of International Commercial Disputes. experienced institutions have emerged providing impartial arbitration services. in ARBITRATION & THE LAW: AAA 124 (1994) [hereinafter Hoellering. language. the parties may decide many aspects of the proceedings. 6 COUNSEL’S ANNUAL REPORT. participants may also retain existing counsel. 1993-94 Michael F.6 Those who are familiar with this industry are well aware that the growth of international arbitration would not have been possible without the intellectual and operational support of the various administering institutions. likely maintenance of the business relationship if the parties so desire. including the arbitrators. governing law. time tested rules for the conduct of arbitral proceedings. coupled with a reluctance on behalf of parties to bring their disputes before a foreign court system. and savings in both cost and time. has created a growing market for the resolution of international disputes by arbitration. and a neutral locale.
Because arbitrators do not have the power to enforce arbitration awards. Ecuador. Finland. Colombia. and once the award is confirmed. Tunisia. Sri Lanka. Singapore.N. France. Niger. 2517. Id. Egypt. Morocco. at S-l [hereinafter Scoreboard of Adherence].S.S. China. I. Indonesia. was not entered into force in the United States until December 29. Kenya. Of further significance are the various bilateral and multilateral treaties which play an important role in assisting parties who seek enforcement of an arbitral award.Standard Conventions Although most arbitration awards are complied with voluntarily. Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Netherlands. Guatemala. San Marino. Cuba.9 The New York Convention provides for mutual recognition and enforcement of arbitral awards by contracting states. Cameroon. Canada. Cote d’Ivoire. Japan. Slovakia. Slovenia. Czech Republic. Bulgaria. June 1958. Kuwait. Ukraine. Id. The Supreme Court of the India also has provided support for parties seeking to enforce awards judicially by consistently upholding the enforceability of arbitration agreements. Bahrain. Malaysia. 1994). and limits the defenses that may be raised in opposition to the confirmation of an award. and Zimbabwe. Norway. Israel. statutes and treaties are available to assist successful parties. Id. Below are some of the most widely known and utilized conventions for the recognition and enforcement of awards. ratifications and accessions to the New York Convention totaled 101 countries. Yugoslavia. 5 . Korea. Chile. Cambodia. Tanzania. Sweden. Barbados. Belgium. however. Austria. Botswana. Cyprus. there are instances in which a party may fail to comply with an award. Estonia. 8 1970. Under the Indian Arbitration and Conciliation Act. the New York Convention had been ratified or acceded to by Algeria. Bangladesh. 1994. Hungary. Haiti. 330 U. Switzerland. Argentina. Benin. Jordan. Trinidad and Tobago. Madagascar. Philippines. Belarus. India. Germany.T.T. 1994. NEWS AND NOTES FROM THE INSTITUTE FOR TRANSNATIONAL ARBITRATION. Greece. any party to an arbitration may apply to a specified court for an order confirming the award. Macedonia. Thailand. Antigua and Barbuda. Saudi Arabia. United Kingdom. As of October 1. Australia. Burkina Faso. in an attempt to eliminate duplicative litigation following an 7 10. United States of America. Dominica. Latvia. Mexico. 9 Scoreboard of Adherence to Transnational Arbitration Treaties (as of October 1. Ireland. Italy. The New York Convention. Syrian Arab Republic. Guinea. Oct. Uruguay. Central African Republic. Panama. the party can enforce it akin to a judgment of the court. Ghana. Djibouti. Bosnia and Herzegovina. Turkey. New Zealand. Lesotho. Monaco. Luxembourg. Conventions stipulate support for the use of arbitration and specify the conditions for enforcement of foreign arbitration agreements and awards. New York Convention The United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention)7 was prepared and entered into force in 1959. Russian Federation. Spain. Georgia. Mali. 3 [hereinafter New York Convention]. 21 U. Denmark. Uganda. Poland. Croatia. Costa Rica. Romania. Peru. Holy See.8 As of October 1994. South Africa. Nigeria.
Id. 506. 520 n. as well as to “arbitral awards not considered as domestic awards in the state where the recognition and enforcement are sought.S.T. at 322. Observations on the Finality of ICSID Awards.which the recognition and enforcement of the award is sought.11 there has been a reluctance among American courts to reverse an award on the basis of any of these defenses. “courts have been careful to take into account the strong public policy favoring arbitration and to adopt standards and define defenses in a manner that can be uniformly applied on an international scale. supra note 26. 50-53. supra note 27. at 1291. also permits courts to refuse to enforce an award if the subject matter of the arbitration is not capable of settlement by arbitration under the law of the country in which enforcement is sought. Arbitral awards rendered pursuant to the ICSID Convention “shall be binding on the parties and shall not be subject to appeal or to any other remedy except those provided for in [the ICSID] Convention. § 2. 6 . an international institution created by the ICSID Convention.T. 17 18 19 20 Aron Broches. 17 U. or if it would be contrary to the public policy of that country. the self-contained nature of (Richard J.12 In fact. art. at 322. ICSID Convention. see Scherk v.S. supra note 15.” established an autonomous and self-contained dispute resolution system.14 II. 6 ICSID 322 (1991). arts. supra note 27.S. 16 REV. Medalie ed. 12 Rivkin.10 The New York Convention applies to awards made in the territory of a state other than the state in . 21 U. supra note 12.17 ICSID provides a forum for the arbitration of investment disputes between governments and foreign investors.. at 135. 21 U. ICSID Convention The Convention on the Settlement of Investment Disputes of 1965 (ICSID Convention).15 sometimes referred to as the “Washington Convention of 1965. art.20 In fact. Convention].”16 Although Article V of the New York Convention sets forth five grounds for the refusal of enforcement. V. at 2519.15 (1974). They have therefore construed narrowly any defenses to the enforcement or recognition of an award.16 The system is administered by the International Center for Settlement of Investment Disputes (ICSID). 321. Alberto-Culver. 417 U. however.”18 The arbitration procedure is governed entirely and exclusively by the ICSID Convention.19 Neither the procedure nor the awards rendered thereunder are subject to challenge in the national courts of contracting states. V. Id. § 1. 14 New York Convention.T.S. 11 Id.arbitration. Broches. 1991). Broches. 13 Id.” 13 The New York Convention. at 2520.
1992-93 Michael P. at S-l 7 . Foreign Governments]. 127 (1993) [hereinafter Hoellering. or its designated constituent and a national of another contracting state. in ARBITRATION & 124. Arbitration Involving Foreign Governments and Their Instrumentalities. and (3) the parties to the dispute have consented in writing to ICSID’s jurisdiction. (2) a dispute between a contracting state. THE LAW: AAA GENERAL COUNSEL’S ANNUAL REPORT. supra note 14. the dispute must satisfy the following three criteria: (1) a “legal” dispute arising “directly out of an investment”.23 21 22 23 Id.21 In order for ICSID to have jurisdiction.the ICSID Convention limits the role of national courts to recognition and enforcement of awards. Hoellering. ratifications and accessions to the ICSID Convention totaled 113. Scoreboard of Adherence.22 As of October 1994.
Major Institutions Institutional arbitration is that which is administered by any one of the existing specialist arbitral institutions under its own rules of arbitration. without affecting the arbitrator’s liberty of decision. supra note 15. and the China International Economic and Trade Arbitration Commission (CIETAC). 24 25 26 27 28 29 Rivkin. draw the arbitrator’s attention to substantive issues.25 handling approximately 350 new international cases each year. the ICC reviews the arbitrator’s final award. before signing the award. The Court may lay down modifications as to the form of the award and. cost and financial administration of proceedings to more limited.42 Rivkin. and rather importantly. 7 . ranging from strict and extensive control over the progress. at 127.. under the ICC Rules. at 127. at 127-28.24 These institutions.27 These rules delegate to the institution certain functions that are typically reserved for the arbitrator. conducting hearings worldwide and maintaining wholly international panels of arbitrators. supra note 15. the American Arbitration Association (AAA).22. supra note 15. incorporates nationals from approximately fifty-five different countries. Id. 7 (1988) [hereinafter ICC RULES]. it is the institution that has the authority to make this determination. International Chamber of Commerce Court of Arbitration The ICC administers and supervises International Chamber of Commerce arbitration. even essentially ancillary services. INTERNATIONAL CHAMBER OF COMMERCE. The AAA’s panel of arbitrators. offer a truly international proceeding. Rivkin. 1990). W. ICC RULES OF CONCILIATION AND ARBITRATION art. INTERNATIONAL CHAMBER OF COMMERCE ARBITRATION 19 (2d ed. with the exception of CIETAC. in fact. LAURENCE CRAIG ET AL.26 The ICC Rules contemplate further institutional guidance and supervision over the arbitration proceedings than do the rules of other institutions. Arbitral bodies offer institutional advantages that can expedite the progress of an arbitration. to submit it in draft form to the International Court of Arbitration. at 127 n. conduct. For instance.”30 Among the leading institutions are the ICC International Court of Arbitration (ICC). I. prior to its signing. the London Court of International Arbitration (LCIA). “[Arbitration institutions can perform many and varied functions in the international arbitral process. to ensure its enforceability. whereas other institutional rules provide that it is the arbitrator who decides the prim a facie validity of the arbitration agreement.28 Additionally.29 The ICC Rules require the arbitrator.
and will act as appointing authority or administrator or both for the United Nations Commission on International Trade Law (UNCITRAL) Rules. and Securities Rules. Employment. under these rules arbitrators enjoy broad autonomy in the conduct of the proceedings. after considering additional items such as the complexity of the case. the AAA’s Rules do not contemplate detailed scrutiny by the institution of the arbitrator’s award before it is released to the parties. the AAA negotiates a fee with the arbitrators and the parties. II. Once AAA efforts to organize the proceedings have culminated in the constitution of the tribunal. the number of international arbitrations it handles is growing.66 For instance. The ICC’s fees are typically based on the amount in issue. supra note 15. the arbitrator will draw up. on the basis of the documents or in the presence of the parties and in light of their most recent submissions. and were developed for the flexible administration of international disputes. Patent. however. the ICC may set the fees below or above the indicated scale. and the time spent by the arbitrators. 6 WORLD ARB.In an ICC arbitration. its Commercial. at 127. The AAA’s Rules are designed to be used by other arbitral institutions as administering bodies. Transnational Dispute Resolution: Litigation or Arbitration? Part II. and to become familiar with the case. the duration of the proceedings.30 Under this rule. parties must have “Terms of Reference.31 The AAA administers international cases worldwide via its International Arbitration Rules.” a procedure which has been compared to a pre-hearing conference and described as an opportunity for the arbitrators to get to know each other and counsel. Where is Justice Best Achieved? An Arbitrator’s View. as long as the parties are provided due process. which will then be reviewed by the ICC. as contrasted with the ICC Rules. American Arbitration Association Although the AAA is known primarily for domestic arbitration. a document defining his terms of reference. 125. The AAA also administers cases under IACAC Rules. Arbitrators appointed by the AAA often serve without compensation if the whole matter can be concluded in a day. Complex Disputes. before proceeding with the preparation of the case. & MEDIATION REP. 125 (1995). In excep tional cases. 30 31 Rivkin. 8 . For more complicated arbitrations. fluctuating between 200 and 250 cases per year. and its Supplementary Procedures for Large.
the rules of the LCIA are less intrusive and provide the tribunal and the parties with greater freedom. it provides comprehensive services for arbitrators under its own rules and under the UNCITRAL Arbitration Rules under any system of law and in venues throughout the world. Unlike the ICC. In India. fully administered international disputes. the Indian Council of Arbitration has been providing users of arbitration with an unrivaled array of time-tested services that include ICA Arbitration. IV. The fees are based on work completed and are established by the LCIA after consultation with the parties before the arbitrator is appointed. whereas the ICC requires most of the payment for its services early in the arbitration. Indian Council for Arbitration For over 40 years. With respect to cases which are not to be administered by the LCIA. central or national arbitral organisations have been established which provide facilities for arbitration of commercial disputes. They enjoy unique prestige and confidence of the trade and industry.III. the LCIA tends to appoint English Queen’s Counsel as its arbitrators. For example. They enjoy unique prestige and confidence of the trade and industry. In most of the industrialised countries. 9 . through its president and vice presidents. the LCIA spreads the payments over the course of the arbitration. In India. London Court of International Arbitration The LCIA is a specialist organization which concentrates almost exclusively on institutional. ICA is the one resource for all your dispute resolutions needs. the Indian Council of Arbitration established in 1965 is the apex 32 Id. as well as education and training programs.32 Although other institutions appoint arbitrators from many different countries. is reluctant to act as an appointing authority for arbitrators. the Indian Council of Arbitration established in 1965 is the apex arbitral organisation In most of the industrialised countries. central or national arbitral organisations have been established which provide facilities for arbitration of commercial disputes. Although based in London. the Court of the LCIA. Coupled with our quality case administration and panel of arbitrators. ICA Conciliation and ICA Maritime. handling approximately eighty to ninety new international cases each year.
The Venue is a fully loaded with all necessary latest technologies to facilitate arbitral proceedings. Chartered Accountants. In India. Logistic Industries. Corporate secretaries. CNICA boast of its exclusive arbitration books and literatures in its library. Architects. Council For National and International Commercial Arbitration (CNICA) aims at well administered domestic and international institutional arbitration. Surveyors .arbitral organisation In most of the industrialised countries. Medical practitioners. Council For National and International Commercial Arbitration (CNICA) provides Arbitration and ADR services for Construction Industries. CNICA also provides 100% secretarial assistance for ad hoc arbitrations. Engineer. the Indian Council of Arbitration established in 1965 is the apex arbitral organisation Council For National and International Arbitration A Premier International Arbitration Institution based in India and promoted by leading arbitration practitioners. They enjoy unique prestige and confidence of the trade and industry. Council For National and International Commercial Arbitration (CNICA) entered a new face on March 23rd 2005 by establishing an arbitral venue in the prime business district at Chennai (Madras) with five state of art arbitral hearing rooms. Financial Services.house lawyers. etcetera. 10 . Maritime. Valuers. The objective of the CNICA inter alia is to provide the best platform for Arbitration and ADR mechanisms. central or national arbitral organisations have been established which provide facilities for arbitration of commercial disputes. India. IT enabled services etcetra. retired High Court and Sub-ordinate Judges. In. Council For National and International Commercial Arbitration (CNICA) was founded on January 2004 at the Metropolitan Port City of Chennai (Madras). Council For National and International Commercial Arbitration (CNICA) is a leading Arbitration and ADR service provider upholding the highest standards in the domestic and international arbitration arena. CNICA’s panel of arbitrators consist of eminent legal practitioners.
at 6. procedures. 1993.33 as well as the anticipated development of the Commercial Arbitration and Mediation Center for the Americas (CAMCA). With the advent of these and other specialized institutions. June 1994. Id. 18. expedited arbitrations and a combined mediation and arbitration procedure.A. but there is also a recognition of the need for some to be highly specialized in particular industries. 33. on the UNCI. Arbitration Protects Intellectual Property. however. Oct. 35 36 37 38 WIPO Arbitration Center Opens. RESOL.TRAL Rules. An institution such as the newly established World Intellectual Property Organization’s (WIPO) Arbitration Center. DISP.. the WIPO Arbitration Center maintains lists of specialized mediators and arbitrators. provisions on the confidentiality of the circumstances of an arbitration. originally.36 The WIPO Arbitration Rules were based.35 In order to serve the interests of parties who choose WIPO for its specialized services.New Institutions As can been seen from the progressive development and creation of various new institutions. World Intellectual Property Organization Arbitration Center The WIPO Arbitration Center commenced operations in October of 1994.37 Several new features and modifications distinguish the WIPO Rules from the UNCITRAL Rules.34 The center administers mediations. and suggest a second level of specificity beyond the more general providers of international arbitration services. 11 . 34 Kenneth Parks et al. PROPRIETARY RTS. and panels of arbitrators designed to suit their particular needs. parties with specific kinds of disputes may now engage in a highly specialized administration of services with rules. World Intellectual Property Organizational Document ARB/OR/2. and were developed by the Secretariat and refined by a group of international arbitration expert advisors. I. and provisions relating to certain procedural aspects of intellectual property litigation. see infra part IV. offering specialized services for the resolution of international intellectual property disputes. including several provisions directed specifically at intellectual property disputes: a provision on the protection of trade secrets at issue in an arbitration.38 33 For a discussion of the WIPO Arbitration Center. fully administered arbitration of international disputes is certainly not a static movement.74 are both directed at serving discrete subject matter. arbitrations. J. Pons. Ted E. 7. 33 (1995).. Not only are new institutions being developed. 7 J. Id.
88 Notably. Id. and operates under the auspices of the AAA.II.41 39 40 41 Id. in which prospective arbitrators are given intensive role-play training with typical problems arising in the course of an international commercial arbitration. Id. 12 .40 The Asia/Pacific Center offers arbitration. and conciliation services. the Asia/Pacific Center for the Resolution of International Business Disputes (Asia/Pacific Center) was founded in 1985. Asia/Pacific Center In recognition of the enormous growth of trade and investment in the Asia/Pacific region. in addition to conducting various educational programs. the Center sponsors an international arbitrator training workshop. mediation.39 The Asia/Pacific Center is headquartered in San Francisco.
and supervision that disputants especially need when choosing to resolve their problems outside of the courtroom. economy. 4. the stated goals of arbitration—namely. N. the parties must arrange to appoint arbitrators and deal with such issues as objection. however.Y.J. 42 George H.94 They must either develop their own rules in their arbitration agreement or at the time of the arbitration.”98 In a non-administered arbitration. 43 Id. 46 Friedman. at 3. UNCITRAL Arbitration Rules. that ad hoc arbitration fees on the continent of Europe may be even higher than those charged by some institutions. involves arbitration outside the established administrative bodies. at 3. enabling the arbitrator to tackle the relevant substantive issues. burdens such as objections to the continued service of the arbitrators.45 The parties and the arbitrators are “on their own” for all aspects of the case. it has also been noted that “the potential for either a lack of arbitration experience and knowledge or a lack of cooper ation. guidance. will fall upon the parties and can produce awkward results. Administered Proceeding.46 The stated goals of an ad hoc system include the prompt resolution of disputes. scheduling of hearings. or use standard rules that have been promulgated to assist parties in ad hoc arbitration—i. speed.43 Administrative support clarifies the issues prior to the actual hearing. in contrast. Aug. as well as the avoidance of costs in the form of administrative and arbitrators’ fees specified in the rules of many of the institutional bodies. Without the assistance of the institution.42 Institutional arbitration provides the quality assistance.44 Ad hoc arbitration. One authority suggests. and collection and disbursement of arbitrator compensation.Why Institutional is Preferable to Ad Hoc Arbitration The institution’s participation in the arbitral process is a delicate balance between providing the necessary supervision and guidance while according the parties and the tribunal freedom to dictate the conduct of the proceedings. Administered Proceeding]. hearing arrangements.. 1994. 47 Id. 44 Id. The Administered Proceeding. and justice—could not be efficiently realized. increases greatly after a dispute arises. Friedman. L. 97 Although it has been stated that an ad hoc arbitration system can work where the parties or their counsel are experienced in arbitration and are cooperative. often resulting in visits to the courthouse. 45 Id.9 Moreover. at 3 [hereinafter Friedman.e. at 3-4.47 This section outlines the invaluable role of the institution in various aspects of the arbitral proceeding and how this role serves to prevent the problems associated with an ad hoc system.. supra note 90. compensation. 13 . and award procurement.
the probability of choosing a partial adjudicator is higher than through the institution which verifies and prevents the existence of any biases or similarities between the parties and the arbitrator. due to the lack of skills as well as experience in arbitration. the formation of a flawless procedure is not only time-consuming but expensive. Even in the circumstances that the parties manage to determine the rules to be followed. The arbitrators are the steering wheel of the ship of arbitration. The advantage of the process is that the parties can be flexible in detailing the process and creating a structure which is suitable and conducive to their needs. efficient and experienced arbitrator. Predictability: The adoption of ad hoc arbitration involves drafting of procedure to be followed by the parties. there is no certainty that every unseen contingency will be dealt with which is possible while adopting 14 . On the other hand. The objective of the entire selection process is to have an unbiased. On the other hand. ad hoc arbitration which is heavily dependent on the arbitrator is done by retired judges in India who are trained in procedural law rather than arbitration which hinders the speedy disposal of the dispute. Ad hoc arbitration provides the parties the freedom to decide the number of arbitrators to be selected in addition to the right to choose the arbitrators according to their discretion without any limitations. Therefore. Therefore. arbitrators through institutions are not only trained but also specialised in the subject matter of the dispute which increases the efficiency of the process. This. too often leads to unpredictable results which in turn lead to the negation of the very objectives of arbitration. institutional arbitration involves the implementation of the predetermined rules by specialised arbitrators. In addition. it can be concluded that in the matter of selection of arbitrators.a) The Selection of Arbitrators: The choice of arbitrators is the first and foremost task that is undertaken after the parties agree to resort to arbitration for dispute resolution. institutional arbitration involves the option of a list of arbitrators provided to the parties for their perusal to determine the arbitrators to be chosen. In India. the choice boils down to be one of flexibility in ad hoc arbitration compared to predictability in institutional arbitration. b) Flexibility v. institutional arbitration ensures fulfilling the objectives of efficiency and specialisation. When the parties are given unguided discretion to choose the arbitrators in ad hoc arbitration. In contrast. This results in a huge onus on the parties to ensure the success of dispute resolution.
These matters can be time consuming and cumbersome to deal with especially since the parties are involved in multiple tasks. On the other hand. Therefore.benefit analysis of the same. there is a certainty that institutional arbitration will not be interrupted and deferred due to lack of foresight. in terms of the rules and procedure to be followed. On the other hand. on the procedural front. the only recourse available to the parties entering into ad hoc arbitration on the dispute of some procedural matters would be to approach the national courts. With the secretariat playing the role of the middle man. In institutional arbitration. specialised personnel are employed and a fee charged in the institutions leading to efficiency. d) Administrative Hassles: There are administrative matters involved in the process of arbitration which range from the fixation of fees of the arbitrator. institutional arbitration has an administrative secretariat which deals with these administrative matters thereby unburdening the parties of the dispute. Approaching the national courts might result in an inordinate delay and defeat the very purpose of entering into an arbitration agreement for speedy disposal of the dispute. institutional arbitration triumphs over ad hoc arbitration. On weighing the two approaches. the organisation and the arbitral tribunal are available to provide assistance especially in the selection of the arbitrators that might arise during the course of the proceedings. Therefore. 15 . Therefore. administrative fees. even though flexibility might be limited under institutional arbitration. Ad hoc arbitration requires the parties to settle these administrative matters with the arbitrator which can lead to uncomfortable situations. the relations of the parties with each other as well with the arbitrator are maintained.the time. For the performance of the administrative functions. fixing the time limit for the disposal of the dispute among others. predictability in the process ensures that the parties can go ahead with the process without the fear of inconsistencies leading to a failure in the arbitration process.tested rules by the institution. c) Procedural Matters: It has been explained that there is a probability that due to the lack of considering every contingency that could arise while determining the rules for ad hoc arbitration or formulation of rules by the arbitral institution. procedural difficulties might arise. on a cost.
However.institutional arbitration is more consumer. though institutional arbitration involves high costs. recourse to any form of judicial intervention would result in delays which could last for generations due to the arrears and pendency of suits. the professionalism and efficiency involved in the institutional method proves to be more effective. In India. On the other hand. In India. Ad hoc arbitration does not have an arbitral institution that assists in the administrative and procedural matters. Therefore. The parties are required to make all the arrangements to conduct the arbitration. the best incentive for the spread of arbitration is to exercise and guarantee expeditious results which are possible only through institutional arbitration and not ad hoc which is dependent on the demands of the parties. delays are possible in the ad hoc system as well. 16 . However. due to the procedural inefficiencies and lack of co-operation.friendly. Therefore. f) Delay: Inordinate and incessant delays in the judicial proceedings led to the rise of arbitration and alternative dispute resolution techniques. illiteracy and language barriers are a major hindrance for the success of ad hoc arbitration. the effect of the same is negated when compared to the ad hoc arbitration. incorrect decisions are often made which leads to higher costs. e) Cost: One of the driving forces for people to engage in ad hoc arbitration is to avoid extra costs like the administrative fees and the high arbitration amounts charged during the course of institutional arbitration. due to the absence of skill and expertise. institutional arbitration confers a specific time limit on the arbitral tribunals for the disposal of the case. The success of the entire process is based on the co-operation between the parties which might fail resulting in the need for court intervention thereby increasing the costs by leaps and bounds. If both the models add to the same cost burden. This supervision and prescribing a flexible deadline curtails the delays and encourages speedy disposal of cases in consonance with the objectives of arbitration.
the order is said to be final and binding in the eyes of the law.g) The Award: Parties enter the arbitration process with an aim to get an award or order leading to the resolution of an outstanding dispute. 17 . Therefore.fulfilment of the principles of natural justice. The arbitration suits also grant the right to the arbitrator to pass an interim order or award to prevent any party from defaulting. expediency and justice is noticed beginning from the selection of the arbitrators to the finality and challenging the award. This screening process done by the institution panellists ensures that no injustice has been done in order to save the parties’ money and time by preventing the necessity to take resource with the courts. On the cost.benefit analysis of institutional and ad hoc arbitration.application of mind by the arbitrator. whether it is through ad hoc or institutional technique. exparte order. the finality of the award due to dissatisfaction cannot usually be challenged unless it can be proved that there has been non. The award is usually given by the arbitrator after providing both parties with a fair hearing and opportunity to present the requisite evidence. reforms as recommended further ought to be undertaken in the Indian system to encourage the use of arbitration mechanisms generally and in particular develop the institutional arbitration technique to co-exist with the prevalent ad hoc mechanism. invalid agreement between the parties among others. institutional arbitration is the best option available. When the final order is passed by the arbitral tribunal. The need to bring in the restoration of trust in the system of dispute resolution through legal means. Therefore. the award in an arbitration suit is reached only after following the principles of natural justice. the superiority of the former in terms of efficiency. provides for challenging this order only on certain limited grounds like that of non. On studying India’s position with respect to arbitration. Due to the limited available grounds for challenging the award. In India. it is noticed that ad hoc arbitration can be used only to resolve disputes of smaller claim and less affluent parties. The benefit of institutional arbitration as compared to ad hoc arbitration with respect to the award is that there is a screening and scrutiny process involved before the finality of the award is declared. lightening the burden on the Indian judiciary as well as ensure speedy disposal of disputes especially in commercial matters. the Arbitration and Conciliation Act.
30 TEX. because of limitations on the tribunal’s authority: tribunals do not possess all of the normal powers of a court. The UNCITRAL Arbitration Rules and several institutional rules touch on the topic of interim measures. In doing so. Below is a discussion of two items which may be considered when evaluating the kinds of arbitration services an institution can offer. such as ordering their deposit with a third person or ordering the sale of perishable goods. and (3) measures which aim to prevent the transfer or dissipation of assets. 1991) (describing the types of interim measures allowed under typical arbitration rules). 18 . Arbitral Capacity to Grant Interim Relief Interim measures of protection are available through arbitrators. and the Courts: Interim Measures of Protection—Is the Tide About To Turn?. however. L.48 One author has classified the nature of interim measures into three broad categories: “(1) measures which relate to the taking and preservation of evidence. Injunctions and attachments are the types of provisional remedies most frequently requested. INTERNATIONAL COMMERCIAL ARBITRATION 306-07 (2d ed. A. it is still the courts that are frequently burdened by parties’ requests to grant su ch relief. at the request of either party.102 The UNCITRAL Arbitration Rules refer to the arbitral tribunal’s taking.”103 It has been said that this rule is “far short of the 48 See ALAN REDFERN & MARTIN HUNTER. that parties opting to use arbitration to resolve their disputes expect to remain free from court intervention during the proceedings. Alan Redfern. but a broader range of provisional relief may be awarded by arbitrators in the course of an arbitration. Arbitration Id.Future Capacities That Would Advance The Movement Toward Responding To Parties’ Perceived Needs Arbitral institutions striving to provide a quality service that is both fair and efficient must continuously monitor the needs of its users. INT’L. (2) measures which aim at preserving the status quo. this power is contingent upon the wording of the parties’ contract and applicable arbitration rules. 78 (1995).180 For instance. 50 Despite the arbitrator’s authority.matter of the dispute. temporary in nature. in certain circumstances.”49 These are provisional. including measures for the conservation of the goods forming the subject-matter in dispute. 71. such as when arbitrators have not yet been appointed or where third parties are involved. “any interim measures it deems necessary in respect of the subject. institutions can improve upon the services offered in accordance with the parties’ perceived needs. and urgent.181 It is important to keep in mind. 49 50 D.J. the courts will be required to provide assistance.
storage. This would ensure compliance with the expectations of the parties. RULES OF THE LONDON COURT OF INT’L ARBITRATION art. art. sale or other disposal of any property or thing under the control of any party. B. The institution could assemble a preselected group of expert neutrals with requisite qualifications. supra note 47. subject to immediate designation by the court. 19 . no institution has created such a mechanism for dealing with interim relief. while attempting to harness the potential for arbitral resolution of the dispute. Under such a system. 53 Id. Option for Appellate Review The notion of appellate review of an arbitral award within an institution is a relatively novel idea.158 The author quickly pointed out. is for institutions to make arbitrators available to respond to requests for preliminary relief where it is sought in connection with a dispute subject to an arbitration clause. 22. One author has suggested that institutions could amend the standard form rules of arbitration in order to clarify the type of interim measures which arbitrators are empowered to order. including measures for the conservation of goods. It may. that appellate review of the award 51 52 AAA Int’l Rules. however.”184 The AAA Rules provide that upon request by any party.100 and the LCIA Rules provide that the tribunal shall have the power to “order the preservation. however.51 The ICC Rules only refer to the “relevant powers reserved to the arbitrator” without indicating what these powers are. including lawyers and industry experts.” 52 Where the rules do not provide the necessary authority to grant the relief sought. be in the interest of arbitral bodies to investigate the possible advantages and disadvantages to having such a procedure in place.168 By consenting to arbitrate under such rules. the tribunal may take whatever interim measures it deems necessary regarding the subject matter of the dispute. it may be useful for the parties to have an avenue other than the judiciary through which to obtain a remedy. even with the agreement of the parties. who could be available on a standby basis.1(h) (1985) [hereinafter LCIA RULES]. To date. 13. either at the time of contract or upon submission of the dispute to arbitration. that “there is a limit to the measures which arbitrators can impose.”53 Another possible response to this inevitable problem of burdening the courts each time a party seeks provisional relief beyond the power of the tribunal. and there is also the problem of ensuring that such measures are effective when imposed by a private tribunal rather than by a court of law.kind of interim measures that might well be needed in the modern world of international commerce. parties to arbitration agreements could agree. the parties would then be deemed to have agreed that the arbitrators possessed those powers.
Most importantly. Id. by negating the decision in whole or in part. speedy resolution of international disputes. Appellate review. there may be no need to pursue review of the award in court.” the latter described as review by another body of the decisional process as well as of the substance of the award. would not be mandated. in whole or in part. art. The ICSID Convention incorporates provisions allowing for interpretation. While there has been little experience with this type of procedure. supra note 27. to review newly established evidence.56 In contrast.57 Annulment. preferably the one which rendered the award. the arbitral decision. 55 56 57 58 note 26. review of the award could lengthen the time and increase the cost of the process. and to evaluate any allegations of bias.T. at 1290-91. supra note 26. For instance. The petition for rehearing might be focused and restricted to the seven limited items set forth in the New York Convention for determining when the recognition and enforcement of an award will be refused in a national court. returns the parties. at Id.S. Perhaps by keeping the review within the institution. The annulment procedure has been distinguished from an “appeal.T. 20 . that there has been a serious departure from a fundamental rule of procedure. that there was corruption on the part of a member of the Tribunal. at 322. as to the portion negated. certain negative aspects associated with this concept of institutional appellate review. but would be available for parties who wish to have internal review of the award. art. 17 U.T. Establishing a new panel of neutrals responsible only for appellate review would be one way to expedite the review process.S. at 1290-91. to their original litigating positions.55 of an award by a tribunal.S. 17 U. however.58 Article 52 of the ICSID Convention lists the following five grounds upon which annulment may be granted: (1) (2) (3) (4) that the Tribunal was not properly constituted. the following example may provide useful information. 52. institutional appellate review would need to be accomplished within a short. in accordance with the institution’s rules. Broches. fixed span of time. art. annulment invalidates. or supra 54 ICSID Convention. that the Tribunal has manifestly exceeded its powers. institutional appellate review would only occur where there is express agreement among the parties. ICSID Convention. 17 U. or lets the decision stand if the plea for annulment is rejected. In order to accommodate the expectation of the parties that arbitration is a cost-effective. Additionally. 52.161 There are. however.will take place within the institution.54 revision103 or annulment. which may result in its reversal or modification. 50. 1289. institutional review affords the parties an opportunity to correct error.
In other words. Id.(5) that the award has failed to state the reasons on which it is based.176 It has been stated that: The key for the foreseeable future will be that the review panel answer a question different from that answered by the original tribunal. If the tribunal was confronted with deciding whether it possessed jurisdiction. supra note 166. 59 60 61 62 63 Caron.168 Critics have suggested that annulment is too readily available. they could either design such review in the arbitration clause.177 To the extent the parties believe that appellate review would be a benefit. art. but also in the courts of those states where enforcement or recognition is sought. The review panel thus exists primarily to deal with the grossly aberrant decision. . once again. at 52. 53(1). the standard of review should be used to keep the primacy of decision with the initial tribunal since there is little reason to believe that the review panel’s decision would be more accurate. 64 as well as to the notion that a second tribunal will yield a better decision than the first. the review panel should consider whether the decision as to jurisdiction was manifestly wrong. arbitration may proceed indefinitely—a series of annulments undoing a series of arbitrations. ' Id. the proceedings in those courts may be subject to appeal. at 47. supra note 26.61 Furthermore. Id. the opportunity to include that aspect of the rules should they deem it appropriate. or seek drafting assistance from an institution.59 Consequently.S. “[t]he award .62 Under ICSID. the ICSID system provides only one opportunity for such an attack— the annulment proceeding under discussion.”63 Concern has also been expressed as to the arbitral decision-making process generally.172 In contrast. 17 U. Arbitral institutions might also consider incorporating into their rules a limited mode of appellate review giving parties. and the capacity for error by the respected arbitrators. it has been pointed out that international commercial arbitral awards outside of the ICSID regime generally may be attacked not only in the courts of the state where the award was rendered. ICSID Convention. thereby undercutting the finality of ICSID awards and greatly delaying the total process.T. shall not be subject to any appeal or to any other remedy except those provided for in [the ICSID] Convention. . at 1291.60 In response to some of this criticism. 21 .
a number of suggestions have been furthered. The consequences of arbitration like maintenance of good relations among parties and institutional support of supervision. the researcher advocates a symbiotic relation between the courts and the arbitration institutions to ensure that the court is not over-burdened by the suits which can be disposed off through arbitration. the contemporary burden on the courts and the lowering trust of the people on legal method necessitates the coexistence of ad hoc and institutional arbitration for domestic and international commercial disputes in developing countries with India as a model proposed. The proposition put forward is to not only reform the existing institutions to make them more vibrant but also to create new institutions specifically for certain disputes of a particular subject matter. it is necessary for the formation of a tribunal and organisation dealing with only domestic disputes. The reforms mentioned with respect to the Indian model can be applied to the developing countries reeling under similar problems. The prevalent arrangement of institutional arbitration is not favourable for developing countries and it can be concluded that one size that is used even in other countries does not fit all The biggest problem in developing with respect to institutional arbitration is the lack of availability and accessibility to the masses as well as the lack of awareness of the existence of that media. Keeping these objectives in mind as well as the constraints faced by a normal litigant which include poverty. Further. illiteracy and unawareness. To tap the arbitration of domestic disputes. This only enunciates the need to develop an alternative mode for dispute resolution through arbitration. The proposal put forth envisages scaling down the culture of institutional arbitration to a scale such that it is acceptable. 22 . available and accessible to the masses. The aim of the reforms is to expand the adoption of institutional arbitration from international commercial disputes to domestic disputes in developing countries. even though it is true that institutional arbitration is the ideal situation aimed at.Conclusion India forms as a strategically sound model for study as not only is it the world’s largest democracy but also a developing nation facing immense repercussions of docket explosion. Conclusively. time-limit and scrutiny are proposed to be inculcated in a mechanism analogous to the informal arbitration bodies like the Panchayat at the grass-root levels.
there will be a shift among the people preferring the same over ad hoc arbitration following the rule of supply and demand.As institutional arbitration develops. 23 .
1996 (4th ed. Rautray.  S. C. Sutton and J. 2009). Tripathi. Russell on Arbitration (22nd edn.BIBLIOGRAPHY  Dr..  Mr.  W. Gill. Kwatra. The Arbitration and Conciliation Act.. 2008). Slate II. D. The New Arbitration and Conciliation Law of India (New Delhi: The Indian Council of Arbitration. “International Arbitration: Do Institutes Make a Difference?” 31 Wake Forest Law Review 24 . J. London: Sweet and Maxwell). S. Allahabad: Central Law Publications. Master Gide to Arbitration in India (New Delhi: CCH India.  G. K. K. 1996).
45 Municipality of Echague vs. Leopoldo M. Abellera, Et Al.

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