Arbitrators serve as impartial adjudicators in dispute resolution, sidestepping
lengthy court proceedings. Appointed or agreed upon by parties, they assess
evidence, apply relevant laws, and issue binding decisions. Their neutrality and
expertise ensure equitable resolutions. As facilitators of alternative dispute
resolution, arbitrators significantly reduce legal backlog and costs while
upholding the justice system's integrity.
In our daily lives we counter numerous disputes with anybody at any time,
anywhere. To solve all the disputes we need patience and calmness. There are so
many disputes which do not get solved by the parties on their own and for such
disputes parties do need a third party. It could be anyone, it could be either a
teacher or a student. Earlier when two individuals used to have disputes among
themself the elder one used to resolve them. In today's era when the number of
disputes has arisen in such a manner that the common phrase used is "will see
you in Court" it is hard to resolve a dispute easily.
Arbitration has existed since the Vedic era. In ancient times there were two
courts; the first court was the official regular court while the other was for
dispute resolution. In ancient times the disputes were settled by the village
elders. As per Hindu law, there were a total of three types of popular courts
'Puga' the local courts, 'Srenis' the people engaged in the same business or
profession, and the 'Kulas', who were members concerned with social matters of a
particular community and all these three bodies were the early arbitration
courts in India.
In Muslim law "hadiya" is a commentary on Muslim law which states the provisions
between the disputing parties. In Muslim law, Qazi often has the given authority
to resolve the dispute by acting as a third party.
During the British era certain courts still used this form of court. These
popular courts continued to flourish in India till the beginning of British
rule. During British rule the government did not accept all the matters and such
matters were referred through third-party dispute resolution. The dispute was
resolved with the assistance of a group of wise persons in the society popularly
known as "panchayat" or "panch."
History Of Arbitration In Modern History
There were several attempts to make proper legislation of the arbitration act in
India. The first arbitration act was introduced in the year of 1899. The
applicable act was later named as Indian Arbitration Act 1899. The Indian
Arbitration Act of 1899, was only applicable in the presidency towns of Bombay,
Calcutta and Madras. The Indian Arbitration Act 1899, had several loopholes like
the bulky process etc. In 1940, The Arbitration Act 1940, came into existence
with the aim to reform the Indian Arbitration Act 1899. The Arbitration Act of
1940 was created to bring uniformity and stability to the Arbitration filed in
The Arbitration Act 1940, had several drawbacks even after reforms such: The
Arbitration Act 1940 had different procedures for different High courts. Another
major setback of the Arbitration Act of 1940, was that there were no such
provisions given for the reappointment of arbitrator if the arbitrator died
during the arbitration proceedings. Also, there were no obligatory provisions
for the resignation of arbitrators at any time.
After Independence, the arbitration and Conciliation Act 1996, came into force
the amalgamation of several declarations and ordinances which have been modelled
on the lines of the UNCITRAL (United Nations Commission on International Trade
Law) framework of laws.
Role Of Arbitrator
"Arbitrators are the umpires of international trade. The power they exercise is
not just judicial but political - it is an awesome power, one that can change
the economic fate of companies and countries." - David Ignatius
An arbitrator plays a crucial role in the arbitration process, which is a method
of alternative dispute resolution (ADR) used to resolve disputes outside of the
traditional court system.
The primary responsibilities and role of an arbitrator
in arbitration include:
The Arbitration Act 1996:
- Impartial Decision-Maker:
The arbitrator is a neutral third party chosen by the disputing parties or appointed according to the arbitration agreement. Their role is to ensure that both parties receive a fair and unbiased hearing.
- Managing the Arbitration Process:
The arbitrator is responsible for managing the entire arbitration process, from scheduling hearings to setting procedural rules and timelines. They ensure that the arbitration proceeds efficiently and fairly.
- Evidence admissibility:
Arbitrators are responsible for making decisions regarding the admissibility of evidence and the weight to be given to the evidence presented by each party.
- Issuing Awards:
Perhaps the most critical role of an arbitrator is rendering a final and binding decision, known as an "arbitration award." The arbitrator carefully considers the evidence, arguments, and applicable law to reach a decision that resolves the dispute. This award is enforceable in court and typically brings the arbitration process to a close.
Arbitrators are often bound by confidentiality requirements, which means they must keep the details of the arbitration proceedings and the award confidential, ensuring that the parties' privacy is protected.
- Section 11 of the applicable act prescribes the procedure for the appointment of arbitrators:
Section 12 of the Applicable act provides grounds for challenge to an arbitrator, and to enforce that justice, fair play, impartiality, and independency must be followed by the arbitrator:
- As per the act, the arbitrators can be of any nationality unless agreed by the parties otherwise.
- The parties can decide the procedure for the appointment of arbitrators, and if they fail to do so, the appointment shall be made by the Supreme Court on an application of the party.
- For sole arbitrators, the parties have to decide within 30 days; otherwise, the Supreme Court or High Court has the authority to appoint with the request of a party.
- For more arbitrators, both the parties decide on an arbitrator, and further, both the appointed arbitrators appoint a third arbitrator as the presiding arbitrator if the party fails to do so, the request shall be made to the court for the appointment of the arbitrator.
- For the appointment of arbitrators in International Commercial Arbitration, the parties are free to agree on a procedure within 30 days, and if the parties fail to do so, the court has the competency.
The parties are free to agree on a procedure for challenging an arbitrator under section 13 of the applicable act.
Section 14 of the applicable act states the substitution of arbitrator due to the inability to perform his function or withdrawal from the arbitrator's office.
Under section 15 of the applicable act, the arbitrator shall avail all the powers conferred to him as it was conferred to the previous arbitrator.
- The arbitrator shall disclose that he does not share any kind of relationship with the parties which is likely to give justifiable doubts.
- The arbitrator may be challenged only if he does not possess the qualification agreed to by the parties and under the circumstances that give rise to justifiable doubts.
In conclusion, arbitrators play a pivotal role in the resolution of disputes
outside the traditional court system. They serve as impartial decision-makers,
ensuring fairness and efficiency in the arbitration process. With their
expertise, they interpret the law, manage proceedings, and issue binding awards.
Arbitrators hold the power to shape the outcomes of legal conflicts, making
their role indispensable in fostering alternative dispute resolution. Their
ability to render just and enforceable decisions underscores the significance of
their position in maintaining the integrity of the legal system.