Arbitration

• Arbitration is an ADR (alternative dispute resolution) method where

the disputing parties involved present their disagreement to one
arbitrator or a panel of private, independent and qualified third party
“arbitrators.” The arbitrator(s) determine the outcome of the case.
While it may be less expensive and more accessible than trial, the
arbitration process has well-defined disadvantages. Some of
disadvantages include the risk losing, formal or semi-formal rules of
procedure and evidence, as well as the potential loss of control over
the decision after transfer by the parties of decision-making authority
to the arbitrator. By employing arbitration, the parties lose their
ability to participate directly in the process. In addition, parties in
arbitration are confined by traditional legal remedies that do not
encompass creative, innovative, or forward-looking solutions to
business disputes.
• Due to this flexibility of Arbitration process
the negotiating parties have control over
the selection of an Arbitrator of their choice

• The Arbitrator is not necessarily be the

Lawyer
• In arbitration, the parties do not create
their own settlement. Instead, the
arbitrator imposes a resolution on the
parties, bounded only by the limitations
articulated in the parties’ agreement

• Unlike in traditional litigation, the

arbitrator’s decision generally cannot be
appealed
• Arbitration was developed by the
merchant class in medieval Western
Europe
• In the medieval period, merchants traveled
to fairs where they could meet and
conduct business with other merchants
• Because these fairs occurred far from the
merchants’ homes, and because the
merchants did not Stay at any particular
fair very long, it was important for the
merchants to create a system to resolve
the disputes that would inevitably arise
from the business conducted at the fair
• Unfortunately, the common law court
system was not an appropriate venue for
the resolution of these disputes because
of its complex procedures
• Moreover, the common law courts had
little understanding of the customary
norms the merchants followed
• Merchants were interested in a system
that would resolve disputes
1. Quickly
2. And in accordance with industry standards
• Arbitration may be used to resolve virtually
any kind of dispute; however, some
disputes may be particularly well-suited to
this resolution process. For instance,
arbitration may provide benefits to parties
who have a relationship with one another
that is likely to continue after the dispute is
resolved
• Because arbitration is less adversarial
than litigation, the process may help
 Binding arbitration
• Binding arbitration is a means of resolving
a dispute that is private, less formal,less
costly and less time consuming than
traditional litigation.the parties agree to
submit their dispute to an impartial
arbitrator authorized to resolve the
controversy by rendering a final and
binding award.
 Non binding arbitration
• A non binding arbitration means either
party can appeal the decision and,typically
request a court trial.these are often used
to try to resolve cases to take them off the
courts docket,usually for smaller dollar
cases.employment cases are binding
arbitration cases because employee is
forced into binding arbitration because
they were required to sign an agreement
to do so as a condition of
employement.most employee rights
attorneys attorneys would prefer to go
The Benefits Of Arbitration As A
Method Of Dispute Resolution
• 1. Confidentiality
• In contrast with judicial proceedings,
arbitration proceedings are held in
private. This is of particular relevance in
disputes involving commercially sensitive
matters which the parties would prefer to
exclude from the public domain.
• 2. Expert Arbitrator
• The Arbitrator may be selected on the basis that
he or she has particular qualifications, technical
expertise or specialist knowledge relevant to the
subject matter of the dispute. As the Arbitrator
is already well versed in the area, there is no
necessity to expend time and money on
informing him or her. The Arbitrator may be
nominated by the parties to the dispute
themselves. Alternatively, the parties may
decide that a particular Institution be charged
with appointing a suitable Arbitrator.
• 3. “Party Autonomy”
• The parties may retain a degree of control over
resolution of the dispute. As there is no
obligation to conduct Arbitration proceedings in
any particular manner, the parties are free to
agree all procedural and evidential
matters. Arbitration is generally perceived as a
more time and cost efficient method of disposing
of disputes than litigation and where parties
choose to actively participate in the
management of the proceedings, this can
certainly be the case.
 Party Autonomy
choice of tribunal, choice of procedure,
choice of place of arbitration

It is well settled that when parties

submit their dispute to a private
contrary intention, they confer upon
that tribunal a discretion as to the
procedure to be adopted in reaching
its decision.
 Direct Participation and
Communication between Disputants
• More direct participation by the disputants
in the process and in designing
settlements.
• More direct dialogue and opportunity for
reconciliation between disputants
• Potentially higher levels of confidentiality
since public records are not typically kept
• More flexibility in designing creative
settlements
• Ground Rules for arbitration
 Ground rules
We ll work to reach the fairest and most
positive agreement for both of us.
We ll practice active listening and sincerely
seek to understand each others interest nd
concerns
We agree nd follow instructions of arbitrater
We agree to take turns in speaking :we wont
interrupt each other.
 Finality of the Award
• Awards made by the Arbitrator are
ordinarily understood to be final and
binding and may only be set aside in
certain limited circumstances. However,
the lack of a real right of appeal may be
unpopular with a disgruntled party who
considers an erroneous award has been
made
• One advantage to arbitration is that the
parties can provide the arbitrator with
discretion to award monetary damages,
nonmonetary damages, or a combination
of both
• In employment disputes, for example,
parties could agree that the arbitrator has
the power to reinstate an employee who
has been discharged, perhaps with back
pay and other employment benefits
 Enforceability of Awards
• Arbitration may be particularly appealing in
the context of international commercial
disputes as it is often significantly easier to
enforce an Arbitration Award in other
jurisdictions than a Court Order.

Arbitration as an alternative method of

dispute resolution continues to increase in
prevalence and popularity, particularly in
 Approach's of Arbitration
• Court-annexed arbitration: one or more
arbitrators, usually lawyers, issue a non-binding
judgment on the merits after an expedited,
adversarial hearing. The arbitrator's decision
addresses only the disputed legal issues and
applies legal standards. Either party may reject
the non-binding ruling and proceed to trial;
• Private arbitration: administered and managed,
by private organizations, or non-administered
and managed by the parties.
• Court Referred: the case may be referred by
the court
Conduct of Arbitral Proceedings
• Equal treatment of parties
• Determination of rules of procedure
• Place of arbitration
• Commencement of arbitral proceedings.-
• Language
• Statements of claim and defence
• Hearings and written proceedings
• Default of a party.-
 Elements of Arbitration
i. Existence of agreement to refer
the dispute to arbitration
ii. Arbitral tribunal must reach
decision based on the facts
iii. The decision is binding on the
parties – enforceable as a court
order
 Conclusion
• The proceedings of both Mediation and
Arbitration may not be used for
subsequent trails
• The arbitrators imposes the agreement on
the parties
• The arbitrator can not be appealed
• Can not be challenged in the court
• Pre and post agreement
• Limited judicial review unless one sided