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Broadly speaking : Regulation of Professional conduct in Arbitration and Mediation

Nov. 24, 2020   •   Suryasikha Ray

Profile of Author: Priya Mishra is a 3rd year law student pursuing B.B.A LL.B from MMDU, Ambala. Corporate Law, Company Law, and ADR hold her keen interests.

INTRODUCTION

Arbitration and mediation are alternative methods of resolving disputes and are increasingly evolved as a preferred selection to resolve commercial conflicts globally as well as in India. The Arbitration and Conciliation Act, 1996 contains all the provisions relating to the settlement of disputes. It occurred to be a high time that necessary steps should be taken to enable quick enforcement for establishing a realistic legal framework. Considering the factors, facets, and the need for time, the prevailing Government established the ordinances to modify distinct provisions under Arbitration and Mediation. It is a widely preferred means for the settlement of disagreements as it is more user-friendly, cost-effective, and leading to expeditious disposal of lawsuits.

WHAT DOES ARBITRATION AND MEDIATION MEAN ?

Arbitration:

The Indian law of Arbitration is contained in The Arbitration and Conciliation Act, 1996 (Act)[1]. Lately, there has been a sequence of judicial verdicts and legislative modifications that implements partly prospectively and partly retrospectively. Part I of the Arbitration Act deals with arbitrations established in India whereas Part II deals with arbitrations seated outside India. The Arbitration Act is primarily based on the UNCITRAL Model ( The United Nations Commission on International Trade Law).

Arbitration is a process in which the argument is accepted to an Arbitral Tribunal which makes a decision ( Arbitration Award ) on the disagreement that is constraining between the parties. In Arbitral tribunals, there is Equal Treatment of parties [2]. The arbitration process includes a defined simple procedure, where disputants plead their issue in front of the arbitrators. There can be more than one arbitrator as defined under Section 10 and 11 of the Arbitration and Conciliation Act, 1996, whose verdict is based on collected facts and hearing from the conflicting parties. It is a quick Non-Judicial litigation method for adjudicating disputes.

In the case of BHEL v. Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited [3].

The Supreme Court held that where the parties accept not to insist upon the limited jurisdiction clause in an Agreement or put forward such objection, and by their conduct, waive such condition and submit themselves to another Court’s jurisdiction, it cannot be said that the Court other than the one in which limited jurisdiction has been granted, would be without jurisdiction.

Arbitration covers :

  • Business Disputes.
  • Environmental issues.
  • Commercial Transactions.
  • Commercial arrangements relating to the use of IP rights.
  • Labour Disputes.
  • Consumer Disputes.

Disputes that cannot be resolved through Arbitration under Indian law includes :

  • Criminal offenses.
  • Matrimonial conflicts.
  • Guardianship issues.
  • Insolvency appeals.
  • Testamentary suits.
  • Trust disputes.

Generally, controversies regarding a thing or property (in rem ) cannot be settled through arbitration. Disputes regarding a particular person (in personam) can be resolved.

Disputes regarding serious assertions of fraud which allegedly entails the efficacy of the arbitration clause, such conflicts are not arbitrable.

Mediation

The Concept of Mediation is historical and deep-rooted in our nation. Earlier, disputes used to be resolved in a Panchayat at the community level. But due to the tremendous population growth, there is an outburst of litigation in our region. The implementation of Section 89 of the Civil Procedural Code, 1908 [4] leads to the introduction of the Mediation technique which acts as an antidote to our judicial system in providing justice to the litigating parties through an informal means. Mediation is entirely a private process. It involves a Party-Centered approach, emphasis mainly on the interests, needs, and rights of conflicting parties. It is a prefabricated structured process to increase consistency and effectiveness in the process and prevent unnecessary hit and trial experiments.

Mediation is a means of resolving disputes outside of the judicial system by voluntary participation in negotiations structured by agreement of the parties and usually conducted under the guidance and supervision of a trained intermediary (Mediator).

  • Mary Rowland [5]

Mediation is a procedure of resolving a conflict, which involves the assistance of the Mediator ( unbiased third person ) in reaching out to the settlement. A Mediator is a person who has dynamic skills and power to render an effective resolution of disputes. Generally, it involves matters which do not involve complex procedural issues. The mediation process creates an efficient convention for mediators and parties to follow in multiple iterations; however, an adjustment may be desirable, indeed even necessary in many cases [6]

In the case of Afcons Infrastructure Ltd v. Cherian Varkey Construction Co. (P) Ltd [7], the Supreme Court observed that all cases relating to business, marketing, agreements, contracts, consumer disputes, and even tortious liability could normally be mediated.

Mediation covers disputes regarding:

  • Worker Compensation.
  • Matrimonial Issues.
  • Commercial Transactions.
  • Personal Injury.
  • Construction.
  • Labor or community relations.
  • Domestic Relations.
  • Employment.

WHY DO WE NEED ARBITRATION AND MEDIATION?

Justice stands for the fair and impartial treatment of all individuals under the law. Indian Judiciary seeks social, economic, and political justice to ensure equality among citizens[8]. The courts in India are overburdened with the backlog of cases and there is no speedy trial for resolving conflicts between the parties. According to a report, currently, there is a backlog of approximately three crore cases in courts across the country. [9]

The formal Litigating process is time-consuming with no guaranteed outcome. The justice delivery institutions are facing serious and solemn issues in delivering justice, solely due to delays in resolving disputes related to civil and criminal matters. Serious concerns have been shown by authorities over delays, expense, and congestion.

Advantages of Arbitration and Mediation over Litigation process :

  • Confidential procedure - Generally, it is a private procedure and the parties approve to keep their actions confidential.
  • Simple and flexible Procedure - it is a more adaptable process. It involves only the parties to the conflict to freely come and examine the issue according to their requirements and motive.
  • Maximum chance of restoring a relationship - It facilitates sustaining a healthier relationship among conflicting parties. Also, helps people to cooperate instead of creating disputes and disapprovals.
  • Less expensive - It is a cost-effective process. It did not allow the conflicting parties to disburse immense capital on nonpartisans and miscellaneous expenses that one has to withstand under prosecution.
  • Quick resolution - It is a very less time-consuming procedure. It helps in resolving disputes in a very short period as compared to the justice dispensing system by courts.
  • Settlement - It aims at achieving resolution or settlement. These settlements generate good outcomes rates of up to 85 percent.
  • Maximum participation of parties - Here, access to justice is considerably simpler as compared to other litigating processes. Those who cannot afford to lose time, fees, and to procure a solution without getting into the complex procedure of the court, opt for this medium.

WHAT MORE CAN BE DONE?

  • Regulation in professional conduct.
  • Awareness at the grass-root level.
  • Creation of good infrastructure for Arbitration and Mediation centers.
  • A better legal framework to execute.
  • Training should be provided in the law schools for taking up this as a profession.

CONCLUSION

Despite historic resistance, these methods gained worldwide acceptance. Providing an alternative to all the traditional justice delivery methods, these methods emphasize on a consensual resolution of disputes and helps in settling disputes through an alternate means.

The objective of these reforms is to lessen the workload of the judicial system and make India core of robust Alternative Dispute Resolution mechanisms, at par with international ideals.

FAQs

1.What is the role of Arbitrator?

  • Act like a judge

2.Which model of law was used by the Indian Arbitration and conciliation Act 1996?

  • European Commercial Arbitration Procedure.

[1] http://www.kaplegal.com/statutes/index.html.

[2] section 61, Arbitration and Conciliation Act, 1996.

[3]https://indiankanoon.org/doc/23437708/.

[4] section 89, cpc1908.

[5]https://www.merriam-webster.com/dictionary/mediation.

[6]Hiram E. Chodosh, " Mediating Mediation in India", available at http://lawcommissionofindia.nic.in.

[7]https://indiankanoon.org/doc/1875345/.

[8]https://en.m.wikipedia.org/wiki/Preamble_to_the_Constitution_of_India

[9]https://m.economictimes.com/news/politics-and-nation/over-3-crore-court-cases-pending-across-country/articleshow/45401641.cms.

The author undertakes that the work submitted is an original creation of the author. The author has not previously submitted the article for the purpose of publication. Any similarity with a previously published content is not intentional. The author shall be personally liable for any infringement of intellectual property of any person, organization, government or institution.


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