FAQs: Arbitration

What is Arbitration?

Arbitration is a procedure and technique to resolve a dispute of (normally) civil in nature (no criminal cases). In arbitration, an independent third party (as an arbitrator) is selected by both the parties, who acts as a judge. An arbitrator listens the issues of both the parties, examines the facts and evidence, and based on facts and evidence, he/she gives the judgment, which is legally binding on both the parties.

What is difference between Arbitration and Litigation? 

Litigation is a courtroom trial where parties have no control; they have to follow the guidelines of the court and instructions of the respective judge/s. In reference to litigation, arbitration is less formal, flexible, time saving, money saving, and parties can decide the time and place of hearing as per their convenience. 

The parties can choose their arbitrator/s as per their choice, but they cannot choose judge of their choice.

What is difference between Arbitration and Mediation? 

Arbitration differs from mediation, as it (arbitration) is an informal litigation procedure; all the procedures are very much similar to litigation i.e. presenting facts and evidence, etc. however, mediation is a sort of negotiation where the mediator suggests and guides the parties to make a mutually acceptable solution. 

Why go for Arbitration? Or what are the benefits of Arbitration? 

By virtue of being flexible, time-saving, and money saving, arbitration has many advantages including:

  • It is faster, as you set the time and date as per your convenience.
  • It is less expensive, as you don’t need to pay unexpected fees of your advocate along with the court fees.
  • Its decision is equally valid and binding as of a court.
  • It can be held in a private place.
  • It is highly confidential.
  • Parties can choose their arbitrator/s. 

In addition to this, another important advantage of arbitration is – as parties have the liberty to choose their arbitrator/s of their choice; in such a case, they can choose an arbitrator who is the subject expert (in reference of the dispute). Some of the cases are required greater attention, testimony, complex evidence, and other factual documents; in such a case, knowledge of an arbitrator (of respective field) facilitates him/her to understand the dispute clearly and arrive at a decision quickly. 

How does Arbitration work?

Arbitration involves the following steps:

  • Selection of a neutral party as an arbitrator by the parties (in dispute);
  • Setting up the rules of procedure by the parties along with the selected arbitrator;
  • A formal trial/hearing in front of an arbitrator;
  • Hearing can be attended by the parties (themselves) or they can be represented by their attorneys;
  • Presentation of facts, evidence, witnesses (if any), and cross-examination by the respective party; and
  • Based on the given circumstance, giving a final binding award.

Is Arbitration final?

Like a court’s judgment and award, arbitrator’s judgment/award is also final and legally binding on all the parties involved in the arbitration.

Who can be appointed as an Arbitrator? 

Any person (at whom both parties have trust and mutual consent) can be appointed as an arbitrator. However, parties can take help of a court of their jurisdiction while selecting an arbitrator, as courts make available the list of arbitrators.

What is Role of an Arbitrator? 

The arbitrator’s role is almost similar to a judge; therefore, he can be called as a private judge, and can act just like a judge whose decision is as binding as of a judge. 

How much does Arbitration process cost? 

The cost normally varies, as it depends on the complexity of the case, arbitrator’s fee, and the length of the arbitration procedure.

How long does Arbitration last?

Though arbitration procedure is faster (than litigation), but depending upon the case, it may take a month to several months.

Am I required to hire a Lawyer? 

Normally, you are not required to hire a lawyer, as you can present your case by yourself or by your representative. However, by understanding the complexities of your case, you might need a lawyer. The fee of your lawyer must be borne by you only.

How can I initiate Arbitration?

If you have signed an agreement (with an arbitration clause) that says that in the case of any dispute – if arises, then that will be resolve through arbitration; in such a case, you are required to follow the instruction of the arbitration clause. 

In lack of an arbitration clause, you can decide it with the consent of your opponent party. However, sometimes judges also instruct the parties to find an arbitrator to resolve the issue.
Is Arbitration process Confidential? 

The arbitration process is entirely a private room process; so, there is no involvement of any other person (who is not related to the case) or even media. Furthermore, the final decision of the arbitrator also remains confidential. 

Is there any Appeal provision?

If you are not happy with the arbitrator’s decision and you believe that arbitrator was biased or has been given award under some undue influence, or decision is not fair (because of some substantial reason that you can proof); in such a case, you can ask your arbitrator to reconsider the decision or else you can appeal in the court of law.

What kinds of disputes can be arbitrated?

Mostly civil cases can be arbitrated. Furthermore, whatever the issues that the parties agreed (in advance) to resolve through the arbitration, can be arbitrated. Such kind of dispute, normally, involves contract and other legal agreement.   
Rarely a criminal case can be arbitrated; as such, there is no scope that a criminal case can be arbitrated.

Where does Arbitration take place?

Arbitration can be taken place anywhere depending upon the convenience of the parties. It is entirely private in nature; hence, it can be held in a hotel room, conference room, office’s seminar room, arbitrator’s place, or even at your home if equipped with such facilities and parties agreed upon.