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Similarities And Differences In The Adjudication Process Between The Courts And Arbitration

The process of Adjudication in the Court and the Arbitration, both are awaited for resolving the disputes between the parties. But the arbitration process is completely different from the courts adjudication, albeit both have some similarities also. The process of courts adjudication is a legal process which resolves the issues between the conflicting parties by delivering the judgment.

The Court's judgment is legally binding on both the conflicting parties. And the process of arbitration is termed as the private proceedings between the parties to have an amicable resolution on the disputes between them. The award or decision given by the arbitrator is non-legal and non binding on the parties. The process of courts adjudication is a wider and more complex method as compared to the arbitration process.

The judgment from the courts adjudication is considered as the binding decision on both the parties, while the arbitration award is said to be the mutual or informal solution between the parties which is not possible through the courts adjudication. The adjudication is the legal trial or the court based litigation which is opted by the parties after having conflicts between them and on the other side the arbitration is the non-litigation process, which is opted by the parties during the signing the contract with the mutual consent by adding a clause in the agreement of contract for the resolution of future contract disputes.

The adjudication of courts proceedings is strictly governed by the different provisions and laws. The laws like Criminal Procedure Code, Civil Procedure Code, India Evidence Act, and Indian Penal Code are few of the some major laws on the basis of which the proceedings in the courts are generally done. On the other side the arbitration process is governed under the Arbitration and Conciliation Act 1996.

This act provides the rules and procedures for the settlement of disputes outside the lengthy court proceedings. It is an alternative mode of dispute resolution mechanism which provides the resolution method for the dispute or conflict arised between the parties in more easier and amicable manner. [1]

The most approachable method for resolving a legal dispute is to take your issue or matter before the court and the matters resolved by the court with the due process of law. But the legal proceedings most probably take years to resolve the disputes or matter even of small cause. The adjudication or litigation under the courts is a lengthy process which includes evidence, hearings, examinations, statements of witnesses and many others.

The law proceeds the rights and liabilities of the people so the legal proceedings under the law of the country are to be dealt with in a cautious manner. Though this lengthy process creates the daunting remark so the people avoid going to court for justice. So there is an alternative way to resolve the small cause matters or the less serious offences issues between the parties.[2]

This alternative method is the Arbitration which is the most preferred process under the ADR (Alternative Dispute Resolution) to resolve the personal and even commercial disputes between the parties. The arbitration process is the easiest and amicable method of proceedings for resolving the disputes. To understand the proceedings of adjudication and arbitration the difference and similarities between then can give the clear view about the same. The difference and similarities between both the proceedings is discussed in this article.

Differences
The adjudication of courts and arbitration proceedings are widely different from each other. Though both are legally binding on the parties to the suit but there statutory obligations is not same.[3] Both the adjudication of courts and arbitration proceedings has their own benefit and limits in regards to the dispute resolution.[4]

To opt for the one from both the disputes resolution mechanism the subject matter of the suit and the parties prior agreement in the contract plays the prudent role.
  1. Authority/ Presiding Officer
    Adjudication
    In the proceedings of the adjudication of courts, the person who has authority to give a decision is termed as Judge or Magistrate.

    Arbitration:
    The proceedings resolved by the person or entity under the arbitration is called an Arbitrator.

     
  2. Decision
    Adjudication:
    The decision of the courts adjudication proceedings is binding on the parties. The decision of the court is termed as the judgement / order.

    Arbitration:
    The decision given by the arbitration is though binding on the parties, but the decision is made with the mutual consent of the parties. This alternative is not so available to the parties to suing under the adjudication of the courts proceedings. The decision given by the arbitral tribunal as per the provisions of the Arbitration act is called as an Arbitral award.
     
  3. Place of Suing
    Adjudication
    The place for the proceedings of court is decided by the court. The jurisdiction of court is not decided by the parties. It depends upon the different criteria like subject-matter jurisdiction, territorial jurisdiction i.e. residence of the parties and pecuniary jurisdiction. The place of suing under the court's adjudication is governed by the Code of Civil Procedure, 1908. The Section 15 to 20 of the CRPC regulates the courts for the filing of issues by the parties.

    Arbitration:
    The place of suing under the arbitration process is regulated by the Arbitration and Conciliation Act, 1996. The Section 20(1) of the act gives the liberty to the parties to agree for the place of suing on the arbitration matter. If the parties fail to decide the place of suing in the agreement of contract, then it is to be decided by the arbitral tribunal with the consent of the parties as per the clause (2) of Section 20 of the act.
     
  4. Confidentiality of Proceedings
    Adjudication:
    The proceedings held in the court are considered as the public proceedings. Any person can view the proceedings as they are done in the open court with subject to the legal regulations.

    Arbitration:
    The proceedings under the arbitration process are the private proceedings, no third person is allowed.
     
  5. Appointment
    Adjudication:
    The appointment of judge or magistrate under the adjudication of court is done according to the laws mentioned under the Criminal Procedure Code and Constitution of India.

    Arbitration:
    The arbitrator is appointed by the parties as per the law of Arbitration and Conciliation act, 1996. The parties have freedom to appoint the arbitrator with mutual consent.
     
  6. Nature of Proceedings
    Adjudication:
    The nature of proceedings under the adjudication of court are compulsory as they are legally bound to the parties to the suit.

    Arbitration:
    The nature of proceeding under the arbitration method is voluntary.
     
  7. Period of Dispute Resolution
    Adjudication:
    The adjudication process of court generally takes more time as it is a lengthy process.

    Arbitration:
    The arbitrator takes less time as compared to the court proceedings to resolve a dispute.
     
  8. Costs
    Adjudication:
    The adjudication of court is the legal process, so it includes suit / case filing fees, advocates / attorneys fees, court trial costs, etc. In brief it can be said that the cost of adjudication is very high.

    Arbitration:
    The arbitration of court is lower in cost as compared to the adjudication of the court.
     
  9. Appeal
    Adjudication:
    The judgements / decisions passed by the courts are generally appealable to the higher courts respectively subject to provisions of laws.

    Arbitration:
    The awards / decisions by the arbitrator tribunal are not appealable.
     
  10. Flexibility of Procedures
    Adjudication:
    Adjudication process of court is conducted under the statutory and procedural rules of law. It is rigid in nature at some point for the parties.

    Arbitration:
    As in the arbitration process, the rules are construed as per the mutual consent between both the parties. The both the parties have liberty to choose the rules and restrictions for the hearing before the arbitral tribunal.
     
  11. Parties to the suit
    Adjudication:
    In the adjudication of courts proceedings the parties to suit are to be considered to those who are directly or indirectly related to the matter or dispute between the parties.

    Arbitration:
    As in the arbitration process, parties can join the arbitration proceedings by the mutual consent in the agreement of contract by adding their name. So parties to the contract or joinder of parties afterwards can participate in the proceedings having mutual agreement between them.
     
Similarities
Though the process of arbitration and adjudication of courts are widely different, there are quite similarities between the both. The arbitration and adjudication of court both are dispute resolution methods.[5] There are some similarities between the adjudication of courts and arbitration which are discussed below in the following points:
  1. Framework of Hearing of disputes
    The framework of hearing of disputes or issues is quite exactly similar with the few exceptions between the adjudication of courts and the arbitration process. The proceedings in both the process i.e. adjudication of courts and arbitration includes the opening of case, submission of evidence, examination, etc.
     
  2. Representatives
    Generally in both, adjudication and arbitration proceedings the parties to the suit or issue are represented by the advocate / lawyer to plead for the case.
     
  3. Principle of Natural Justice
    The arbitration and the adjudication of court proceedings though both are governed and regulated under the different laws or provisions but both processes are based on the principle of Natural Justice.

Conclusion
In recent times, arbitration is the most preferred method by the people for the resolution of disputes between the conflicting parties, as compared to the adjudication of court proceedings. The arbitral proceedings are less time consuming, low cost efficient and the award is granted to the parties by the arbitrator after having the mutual consent between the parties to the suit. The arbitral proceedings are based on amicable settlement of issues and disputes.[6]

On the other hand, the adjudication of court proceedings takes more time and the cost of proceedings are also higher. But the adjudication proceedings of courts have more reliability and legal recognition as compared to the arbitral proceedings conducted by the arbitral tribunal. As in arbitral proceedings the parties have very limited or right of appeal. In regards to defeat of fact or law but under the adjudication of courts the parties to the suit have the right to appeal if any of the parties is not satisfied with the decision or the judgement of the court.

The structure of the arbitral proceeding is more informal and also lacks in the statutory legality of the rule of evidence. Where the dispute between the parties without construing any legal procedure, statutory authority and of less serious issue, then opts to the lengthy process of the adjudication of courts. The arbitrator is not legally bound to the statutory law as the judges or magistrate is bound in the court.[7]

As the arbitration is a speedier resolution, the contracting parties most probably prefer this process for their small disputes to have easy and amicable resolution but the complex disputes or serious disputes can be only resolved under the adjudication of court proceedings as if having statutory binding of rule of law and evidence.

End-Notes:
  1. Paul Newman and Peter R. Hibberd, ADR and Adjudication in Construction Disputes (Wiley Publisher, 1999)
  2. Avtar Singh, Law of Arbitration and Conciliation (Eastern Book Company, 2021)
  3. Shahzad Kazi,Supreme Court Of India Clarifies What Is Arbitrable Under Indian Law And Provides Guidance To Forums In Addressing The Question,Mondaq,( February 21, 2022, 11 AM), https://mondaq.com
  4. Shoronya Banerjee, Analysing the difference between adjudication and other forms of dispute resolution, ( ( ( February 21,2022, 11.04 AM), iPleaders, https://blog.ipleaders.in
  5. Surbhi S, Difference Between Arbitration and Adjudication, Key differences , (February 23, 2022, 9 AM), https://keydifferences. in
  6. R.C. Saksena, Adjudication By Tribunals In India : Landmark In Field Of Natural Justice, Jstor, ( February 23, 2022, 9.40AM), https://www.justor.org
  7. Sabaha ,Judicial Process in India, Legal services India, https://www.legalserviceindian.com

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