SIMAD UNIVERSITY Keyd abdirahman salaad Alternative Dispute Resolution

SIMAD UNIVERSITY Keyd abdirahman salaad

Alternative Dispute Resolution (ARBITRATION)

Introduction n n Alternative dispute resolution is often referred to as ADR. It describes the ways that parties can settle civil disputes with the help of an independent third party and without the need for a formal court hearing.

Arbitration INTRODUCTION • • Arbitration is the mechanism to settle disputes between parties to a contract, determined in a quasi-judicial manner The Arbitration and Conciliation Act 1996 provides legal frame work for settlement of disputes by mutual settlement out side the court. Central Government may make rules for carrying out the provisions of this act subjected to the approval of the Parliament. Arbitration is an arrangement agreed upon by the parties concerned to refer the disputes to a third party for settlement.

INTRODUCTION • • • The arbitration tribunal can be a panel of arbitrators or a sole individual. Any written document or a clause in a contract for referring the dispute to arbitration shall be an arbitration agreement. The parties to the contract will decide the constitution of arbitration tribunal and mode of appointment as laid down in the contract agreement.

ADR & the Civil Procedure Rules n n Under the Civil Procedure Rules, parties involved in litigation are encouraged to use ADR. The court can also impose cost sanctions if it decides that one or more of the parties have been unreasonable in refusing to attempt to settle their dispute out of court using ADR.

Arbitration n Arbitration is the adjudication of a dispute by one or more specially-appointed experts or lawyers. People who work as arbitrators often belong to the Chartered Institute of Arbitrators. Arbitration is governed by the Arbitration Act 1996.

Arbitration Act 1996, (a) the object of arbitration is to obtain the fair resolution of disputes by an impartial tribunal without unnecessary delay or expense; (b) the parties should be free to agree how their disputes are resolved, subject only to such safeguards as are necessary in the public interest…

Choosing an arbitrator n n Parties are free to decide between themselves whom they will appoint as an arbitrator. Where there is no agreement a party can apply to a court under the Arbitration Act 1996 to have one appointed by the court.

Arbitration by Contract n Arbitration by contract is when the parties have signed a contract and there is a clause in the contract where they agree to refer any dispute over the terms of the contract to an arbitrator.

Arbitration as a Trade Practice n n Arbitration is common in many trade practices. For instance, many insurance policies contain a clause stating that any dispute over a claim will first be referred to an arbitrator before any court claim is made.

APPOINTMENT OF ARBITRATOR • • • The arbitrator has to be appointed within 30 days of such request by any party. In case of failure to comply the above, the Chief Justice of the High Court shall appoint suitable arbitrator as per the request of the party. If the appointed arbitrator fails to perform, the court may replace him by a suitable arbitrator as per the request of the party.

APPOINTMENT OF ARBITRATOR • • • The appointed arbitrator shall disclose any circumstances likely to occur to give doubt about his impartiality. The party to the dispute also can challenge the appointment of the arbitrator on the above count. The mandate of an arbitrator ends without proceedings starts or in the course of proceedings when – – – He is not able to perform He withdraws Parties agrees to terminate him

PROCEEDINGS 1. 2. 3. Proceedings of the arbitration commences from the date of receipt of communication by the respondents, for reference of the matter to the arbitration. The parties shall be treated equally and shall be given full opportunity to present their case. The procedure, place of hearing, time limit for production of documents / evidence etc can be agreed upon by the parties or otherwise decided by the arbitrator.

PROCEEDINGS 4. The arbitration procedure need not follow the Civil court procedures or evidence act, but shall ensure the principles of natural justice. 5. The tribunal shall decide its own jurisdiction. 6. The parties can counter if the tribunal exceeds its authority.

PROCEEDINGS 7. The arbitral tribunal may appoint an expert/institution to examine and to give expert report. 8. If the respondent fails to communicate his defense or fails to appear for oral hearing / fails to produce documents, tribunal shall not treat it as admission by the defaulting party but proceed with the evidences before it and make award.

ARBITRATION COST • • • The tribunal may direct the parties to deposit an amount towards cost etc. as decided by it during the course of proceedings. The tribunal shall fix the cost of arbitration, the fee of arbitration, for witness, administrative charges, fees for experts etc. It decides cost payable by the each party and also decides the cost payable to one party by the other.

ARBITRATION AWRD • • Arbitration award will be decided as per the substantive law in force in India taking into account the terms of contract and usage of trade If the parties arrive at a settlement agreement and request the tribunal to give award accordingly and if tribunal has no objection it may give award accordingly which will have the same effect of the award.

ARBITRATION AWRD n n The arbitral award is issued under the signature of all or majority of arbitrators on the basis of the decision or stating it as mutually agreed upon by the parties. Signed copy shall be delivered to all parties. The award is binding on all the parties. Award is enforceable as if it were a decree of the Court.

CONCLUDING THE PROCEDURE n n On issuance of award arbitration proceedings are terminated. The tribunal is empowered to issue corrections to the Clerical errors set in the award issued, without effecting the decision concluded

Arbitration END