“Upon what grounds should the court be able to upset an arbitrator’s award? What are the differences and similarities between conciliation and meditation? What power the court has when it upset the award of arbitrator”

Introduction

In Bangladesh, the present regulation of arbitration is comprised mostly in the Arbitration Act, 1940, there being distinct Acts dealing with the enforcement of foreign awards. There are furthermore wander provisions as to arbitration, dispersed in special Acts. Three kinds of arbitration are considered by the Arbitration Act of 1940, namely (i) Arbitration in the course of
a match, (ii) Arbitration with the intervention of the court, and (iii) Arbitration else than in the course of a match and without the intervention of the court In perform, the last class attracts the greatest number of cases. In Bangladesh, the present regulation of arbitration is comprised mostly in the Arbitration Act, 1940, there being distinct Acts dealing with the enforcement of foreign awards. There are furthermore wander provisions as to arbitration, dispersed in special
Acts. Three kinds of arbitration are considered by the Arbitration Act of 1940, namely (i) Arbitration in the course of a match, (ii) Arbitration with the intervention of the court, and (iii) Arbitration else than in the course of a match and without the intervention of the court In perform, the last class attracts the greatest number of cases

 Reason when court be able to upset an arbitrator’s award

Historically, a court would upset an arbitration award only under limited circumstances. Faced with strict building of the statute, courts strained to cope with the burden of the arbitrator whoever refuses to appeal the relevant law. Courts answered via crafting an exception. The manifest condone doctrine was devised to consider those extremely rare instances where some egregious impropriety on the fraction of the arbitrators is apparent. Arbitration rewards are subject to greatly constricted review. Doing so avoids Arbitration awards are issue towards enormously limited review. Doing so avoids undermining the twin goals of arbitration, namely, settling disputes efficiently and avoiding long and greatly price litigation. The parties agreed to submit their dispute to arbitration, more likely than not to enhance effectiveness, to reduce costs, or to maintain control over who would resolve their disputes and how or some blend thereof. Manifest disregard means more than error or misunderstanding with respect to the law. The manifest disregard analysis consists of two steps. First, an average person qualified to serve as an arbitrator must have been able to easily perceive the error to be obvious. The term disregard implies that the arbitrator appreciates the existence of a clearly governing principle but decides to ignore or pay no attention to it. The governing law must be well defined, explicit, and clearly applicable. Second, manifest disregard demands not only that the arbitrator made an wrongdoing, but that the error was obvious and competent of being eagerly and instantly supposed by the midpoint person qualified to perform as an arbitrator. The exact governing law ought to possess been well defined, explicit, and clearly applicable, and the arbitrator exhibited willful inattentiveness suggesting that they understand the presence of a clearly governing belief but choose towards ignore or pay none consideration towards it. The drafters of the Act were conscious that an arbitration honor may only be enforced via judicial intervention. Therefore, the Act earns suitable provisions for enforcement of an arbitration award. Faced with strict building of the statute, courts have strained to cope with the burden of an arbitrator whoever refuses to appeal the relevant law. Courts answered via crafting an exception. The manifest condone doctrine was devised to consider “those extremely rare instances where several egregious impropriety on the fraction of the arbitrators is apparent. Arbitrators are judges chosen by the parties to decide matters submitted to them, finally and without appeal[1].

            Grounds for setting aside arbitral award:

            (1) An arbitral award may be set aside if—

(a)        The party making the application furnishes proof that-

  1. A party to the arbitration agreement was under some incapacity;
  2. The arbitration agreement is not valid under the law to which the parties have subjected it.
  3. The party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable due to some reasonable causes to present his case;
  4. The arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration or it contains decision on matters beyond the scope of the submission to arbitration;

Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which, contains decisions on matters not submitted to arbitration may be set aside;

(v)           The composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with the provisions of this Act, or, in the absence of such agreement, was not in accordance with the provisions of this Act.

(b)        The court or the High Court Division, as the case may be, is satisfied that—

(i)                  The subject-matter of the dispute is not capable of settlement by arbitration Under the law for the time being in force in Bangladesh

(ii)                The arbitral award is prima facie opposed to the law for the time being in force in Bangladesh;

(iii)            The arbitral award is in conflict with the public policy of Bangladesh; or

(iii)               The arbitral award is induced or affected by fraud or corruption.

(2)               Where an application is made to set aside an award, the court or the High Court Division, as the case may be, may order that any money payable by the award shall be deposited in the Court or the High Court Division, as the case may be, or otherwise secured pending the determination of the application.

Power of the court to upset the award of arbitrator

The importance of implementing legislation cannot be understated as ratification alone might still be insufficient to protect the rights of parties seeking to enforce their arbitral awards. An arbitral award may be set aside by the High Court only if The High Court finds that The award is in conflict with the public policy of country For the avoidance of doubt, and without limiting the generality of paragraph, it is hereby declared that an award is in conflict with the public policy of the country.

(a) A breach of natural justice occurred

(b) During the arbitral proceedings; or

(c) In connection with the making of the award.[2]

 Unlike a court judgment, which is not final and binding until all appeal mechanisms have been exhausted an arbitral award is final and binding and all that is left to the court is to enforce it, but not to review it The issue with these broad approaches is that it allows virtually any error of law or fact to constitute a violation of public policy and hence grounds for refusal of recognition or enforcement or to set aside the award. This virtually destroys the point behind arbitration being single layered, i.e., without further appeals, much less subject to the appellate jurisdiction of the domestic judiciary. It would appear that great strides have been made to promote arbitration as a form of alternative dispute resolution, at least on the statutory front. In some countries, the judiciary is still struggling to come to terms with their role vis-à-vis the enforcement and recognition of foreign arbitral awards. While part of the problem might stem from newly enacted legislation that requires careful consideration and judicial interpretation and its resultant conflicts with old case law interpreting the prior statutes, the other part of the problem appears to lie with an attitude that is nervous about arbitration. While some of it might be attributed to a lack of familiarity with the process and relevant international consensus, the rest unfortunately appears to be founded on misplaced sentiments of visceral judicial parochialism. The Court may set aside any arbitral award under the arbitration Act, 2001 under this Act, other than an award made in an international commercial arbitration on the application of a party within sixty days from the receipt of the award[3].

 The similarities between mediation and conciliation

A mediator assists the parties in identifying and articulating their own interests, priorities, needs and wishes to each other. On the other hand, the conciliator is an impartial person that assists the parties by driving their negotiations and directing them towards a satisfactory agreement. Both processes involve a neutral third-party who has no enforcing powers. Some of the similarities are describing below:

  1. The parties shall be made to understand that the mediator/conciliator only facilitates in arriving at a decision to resolve dispute(s) and that he will not and cannot impose any settlement nor does the mediator/conciliator give any assurance that the mediation/conciliation will result in a settlement. The mediator/conciliator shall not impose any decision on the parties.
  2. Parties to a suit or other proceeding may agree on the name of the sole mediator/conciliator for mediating between them.
  3. Where, there are two or more sets of parties and are unable to agree on a sole mediator/conciliator, the Court may ask each party to nominate the mediator/conciliator or may nominate/appoint the mediator/conciliator, as it deems fit.
  4. The consent of the persons whose names are included in the panel shall be obtained before empanelling them.
  5. The High Court or the District & Sessions Judge with prior approval of the High Court may in its/his discretion, from time to time, add or delete any person in the panel of mediators/conciliators.
  6. When a person is approached in connection with his proposed appointment as mediator/conciliator, he shall disclose any circumstance likely to give rise to a reasonable doubt as to his independence or impartiality.
  7. In order to facilitate the conduct of mediation/conciliation proceedings, the parties, or the mediator/conciliator with the Consent of the parties, may arrange for administrative assistance by a suitable institution or person.
  8. On the expiry of ninety days from the date fixed for the first appearance of the parties before the mediator/conciliator, the mediation/conciliation shall stand terminated, unless the Court, which referred the matter, either suo motu, or upon request by any of the parties, and upon hearing all the parties, is of the view that extension of time is necessary or may be useful; but such extension shall not be beyond a further period of thirty days.
  9. All the parties shall commit to participate in the proceedings in good faith with the intention to settle the dispute (s), if possible
  10. When a mediator/conciliator receives factual information concerning the dispute(s) from any party, he shall disclose the substance of that information to the other party, so that the other party may have an opportunity to present such explanation as it may consider appropriate.
  11. If any communication between the mediator/conciliator and the Court is necessary, it shall be in writing and copies of the same shall be given to the parties or the constituted attorney or the counsel.

 The difference between mediation and conciliation

Much debate has focused on the distinction between conciliation and mediation, and no universal agreement has emerged. One significant difference between conciliation and mediation lies in the fact that conciliators possess expert knowledge of the domain in which they conciliate.

  1. 1.      A conciliator is an expert in the field at issue. Where a mediator’s main function is to promote communication (and an understanding in each party of the other party’s viewpoint) and compromise.
  2. Conciliation can be used to refer to a range of processes used to resolve complaints and disputes including informal discussions held between the parties and an external agency in an endeavor to avoid resolve or manage a dispute. Mediation is primarily a facilitative process. In such a process assistance is provided in ‘managing a process which supports the participants to make decisions about future actions and outcomes.
  3. Conciliator is a more active intervener, and may have an advisory role on the content and the outcome of a dispute. A mediator, on the other hand usually aids the parties to communicate with each other in order that they can recognize, clarify and discover the matters in dispute before they address their choices to ‘reach an affirmation or make a decision.
  4. The major distinction between mediation and conciliation is that in arbitration proceedings the accolade is the conclusion of arbitral tribunal while in the case of conciliation the conclusion is that of the parties reached at with the aid of the conciliator.
  5. There is a fundamental difference between consensus-oriented methods focused at final outlook in the parties themselves accepting to resolve their quarrel, on the one hand, and, on the other hand, arbitration (and litigation) in which the arbitrator (or judge) inflicts on the parties a decision of the subject in dispute.
  6. The adversarial nature of the training and general experience of most lawyers, arbitrators and judges can sometimes make it more difficult for them than for others to be effective as mediators/conciliators.

 Conclusion

Arbitration has been accustomed habitually for the settlement of protests between membership of import clubs and between unlike exchanges in the securities and commodities trade. Many contracts hold a benchmark arbitration clause, referring to the arbitration governs of the respective organization. Numerous arrangements between the parties in industry and industries also supply for the arbitration of controversies stemming out of contracts for the sale of manufactured products, for terms of service of employment, for building and engineering ventures, for financial operations, for agent and distribution arrangements, and for a lot other undertakings.


align=”left” size=”1″ />

[1] Id. Compare Burchell to this expansive view of the arbitrator’s authority in Muldrow v. Norris. 2 Cal. 74, 77 (Cal. 1852) (“[A]rbitrators are not bound to award, on principles of dry law, but may decide on principles of equity and good conscience, and make their award ex aequo et bono [according to what is just and good].)

[2] The U.K. position under Arbitration Act 1996 is almost identical to the New Zealand position in that it also

provides for appeals of law arising from an arbitral award to the High Court. Unless the parties exclude the operation

[3] Retrieved from http://www.businesslaws.boi.gov.bd/index.php?option=com_eregistry&task=lawdetails&law_id=179&controller=law&Itemid=60&lang=en

Retrieved on 02-12-2011

“Upon what grounds should the court be able to upset an arbitrator’s award? What are the differences and similarities between conciliation and meditation? What power the court has when it upset the award of arbitrator”

Introduction

In Bangladesh, the present regulation of arbitration is comprised mostly in the Arbitration Act, 1940, there being distinct Acts dealing with the enforcement of foreign awards. There are furthermore wander provisions as to arbitration, dispersed in special Acts. Three kinds of arbitration are considered by the Arbitration Act of 1940, namely (i) Arbitration in the course of
a match, (ii) Arbitration with the intervention of the court, and (iii) Arbitration else than in the course of a match and without the intervention of the court In perform, the last class attracts the greatest number of cases. In Bangladesh, the present regulation of arbitration is comprised mostly in the Arbitration Act, 1940, there being distinct Acts dealing with the enforcement of foreign awards. There are furthermore wander provisions as to arbitration, dispersed in special
Acts. Three kinds of arbitration are considered by the Arbitration Act of 1940, namely (i) Arbitration in the course of a match, (ii) Arbitration with the intervention of the court, and (iii) Arbitration else than in the course of a match and without the intervention of the court In perform, the last class attracts the greatest number of cases

 Reason when court be able to upset an arbitrator’s award

Historically, a court would upset an arbitration award only under limited circumstances. Faced with strict building of the statute, courts strained to cope with the burden of the arbitrator whoever refuses to appeal the relevant law. Courts answered via crafting an exception. The manifest condone doctrine was devised to consider those extremely rare instances where some egregious impropriety on the fraction of the arbitrators is apparent. Arbitration rewards are subject to greatly constricted review. Doing so avoids Arbitration awards are issue towards enormously limited review. Doing so avoids undermining the twin goals of arbitration, namely, settling disputes efficiently and avoiding long and greatly price litigation. The parties agreed to submit their dispute to arbitration, more likely than not to enhance effectiveness, to reduce costs, or to maintain control over who would resolve their disputes and how or some blend thereof. Manifest disregard means more than error or misunderstanding with respect to the law. The manifest disregard analysis consists of two steps. First, an average person qualified to serve as an arbitrator must have been able to easily perceive the error to be obvious. The term disregard implies that the arbitrator appreciates the existence of a clearly governing principle but decides to ignore or pay no attention to it. The governing law must be well defined, explicit, and clearly applicable. Second, manifest disregard demands not only that the arbitrator made an wrongdoing, but that the error was obvious and competent of being eagerly and instantly supposed by the midpoint person qualified to perform as an arbitrator. The exact governing law ought to possess been well defined, explicit, and clearly applicable, and the arbitrator exhibited willful inattentiveness suggesting that they understand the presence of a clearly governing belief but choose towards ignore or pay none consideration towards it. The drafters of the Act were conscious that an arbitration honor may only be enforced via judicial intervention. Therefore, the Act earns suitable provisions for enforcement of an arbitration award. Faced with strict building of the statute, courts have strained to cope with the burden of an arbitrator whoever refuses to appeal the relevant law. Courts answered via crafting an exception. The manifest condone doctrine was devised to consider “those extremely rare instances where several egregious impropriety on the fraction of the arbitrators is apparent. Arbitrators are judges chosen by the parties to decide matters submitted to them, finally and without appeal[1].

            Grounds for setting aside arbitral award:

            (1) An arbitral award may be set aside if—

(a)        The party making the application furnishes proof that-

  1. A party to the arbitration agreement was under some incapacity;
  2. The arbitration agreement is not valid under the law to which the parties have subjected it.
  3. The party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable due to some reasonable causes to present his case;
  4. The arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration or it contains decision on matters beyond the scope of the submission to arbitration;

Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which, contains decisions on matters not submitted to arbitration may be set aside;

(v)           The composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with the provisions of this Act, or, in the absence of such agreement, was not in accordance with the provisions of this Act.

(b)        The court or the High Court Division, as the case may be, is satisfied that—

(i)                  The subject-matter of the dispute is not capable of settlement by arbitration Under the law for the time being in force in Bangladesh

(ii)                The arbitral award is prima facie opposed to the law for the time being in force in Bangladesh;

(iii)            The arbitral award is in conflict with the public policy of Bangladesh; or

(iii)               The arbitral award is induced or affected by fraud or corruption.

(2)               Where an application is made to set aside an award, the court or the High Court Division, as the case may be, may order that any money payable by the award shall be deposited in the Court or the High Court Division, as the case may be, or otherwise secured pending the determination of the application.

Power of the court to upset the award of arbitrator

The importance of implementing legislation cannot be understated as ratification alone might still be insufficient to protect the rights of parties seeking to enforce their arbitral awards. An arbitral award may be set aside by the High Court only if The High Court finds that The award is in conflict with the public policy of country For the avoidance of doubt, and without limiting the generality of paragraph, it is hereby declared that an award is in conflict with the public policy of the country.

(a) A breach of natural justice occurred

(b) During the arbitral proceedings; or

(c) In connection with the making of the award.[2]

 Unlike a court judgment, which is not final and binding until all appeal mechanisms have been exhausted an arbitral award is final and binding and all that is left to the court is to enforce it, but not to review it The issue with these broad approaches is that it allows virtually any error of law or fact to constitute a violation of public policy and hence grounds for refusal of recognition or enforcement or to set aside the award. This virtually destroys the point behind arbitration being single layered, i.e., without further appeals, much less subject to the appellate jurisdiction of the domestic judiciary. It would appear that great strides have been made to promote arbitration as a form of alternative dispute resolution, at least on the statutory front. In some countries, the judiciary is still struggling to come to terms with their role vis-à-vis the enforcement and recognition of foreign arbitral awards. While part of the problem might stem from newly enacted legislation that requires careful consideration and judicial interpretation and its resultant conflicts with old case law interpreting the prior statutes, the other part of the problem appears to lie with an attitude that is nervous about arbitration. While some of it might be attributed to a lack of familiarity with the process and relevant international consensus, the rest unfortunately appears to be founded on misplaced sentiments of visceral judicial parochialism. The Court may set aside any arbitral award under the arbitration Act, 2001 under this Act, other than an award made in an international commercial arbitration on the application of a party within sixty days from the receipt of the award[3].

 The similarities between mediation and conciliation

A mediator assists the parties in identifying and articulating their own interests, priorities, needs and wishes to each other. On the other hand, the conciliator is an impartial person that assists the parties by driving their negotiations and directing them towards a satisfactory agreement. Both processes involve a neutral third-party who has no enforcing powers. Some of the similarities are describing below:

  1. The parties shall be made to understand that the mediator/conciliator only facilitates in arriving at a decision to resolve dispute(s) and that he will not and cannot impose any settlement nor does the mediator/conciliator give any assurance that the mediation/conciliation will result in a settlement. The mediator/conciliator shall not impose any decision on the parties.
  2. Parties to a suit or other proceeding may agree on the name of the sole mediator/conciliator for mediating between them.
  3. Where, there are two or more sets of parties and are unable to agree on a sole mediator/conciliator, the Court may ask each party to nominate the mediator/conciliator or may nominate/appoint the mediator/conciliator, as it deems fit.
  4. The consent of the persons whose names are included in the panel shall be obtained before empanelling them.
  5. The High Court or the District & Sessions Judge with prior approval of the High Court may in its/his discretion, from time to time, add or delete any person in the panel of mediators/conciliators.
  6. When a person is approached in connection with his proposed appointment as mediator/conciliator, he shall disclose any circumstance likely to give rise to a reasonable doubt as to his independence or impartiality.
  7. In order to facilitate the conduct of mediation/conciliation proceedings, the parties, or the mediator/conciliator with the Consent of the parties, may arrange for administrative assistance by a suitable institution or person.
  8. On the expiry of ninety days from the date fixed for the first appearance of the parties before the mediator/conciliator, the mediation/conciliation shall stand terminated, unless the Court, which referred the matter, either suo motu, or upon request by any of the parties, and upon hearing all the parties, is of the view that extension of time is necessary or may be useful; but such extension shall not be beyond a further period of thirty days.
  9. All the parties shall commit to participate in the proceedings in good faith with the intention to settle the dispute (s), if possible
  10. When a mediator/conciliator receives factual information concerning the dispute(s) from any party, he shall disclose the substance of that information to the other party, so that the other party may have an opportunity to present such explanation as it may consider appropriate.
  11. If any communication between the mediator/conciliator and the Court is necessary, it shall be in writing and copies of the same shall be given to the parties or the constituted attorney or the counsel.

 The difference between mediation and conciliation

Much debate has focused on the distinction between conciliation and mediation, and no universal agreement has emerged. One significant difference between conciliation and mediation lies in the fact that conciliators possess expert knowledge of the domain in which they conciliate.

  1. 1.      A conciliator is an expert in the field at issue. Where a mediator’s main function is to promote communication (and an understanding in each party of the other party’s viewpoint) and compromise.
  2. Conciliation can be used to refer to a range of processes used to resolve complaints and disputes including informal discussions held between the parties and an external agency in an endeavor to avoid resolve or manage a dispute. Mediation is primarily a facilitative process. In such a process assistance is provided in ‘managing a process which supports the participants to make decisions about future actions and outcomes.
  3. Conciliator is a more active intervener, and may have an advisory role on the content and the outcome of a dispute. A mediator, on the other hand usually aids the parties to communicate with each other in order that they can recognize, clarify and discover the matters in dispute before they address their choices to ‘reach an affirmation or make a decision.
  4. The major distinction between mediation and conciliation is that in arbitration proceedings the accolade is the conclusion of arbitral tribunal while in the case of conciliation the conclusion is that of the parties reached at with the aid of the conciliator.
  5. There is a fundamental difference between consensus-oriented methods focused at final outlook in the parties themselves accepting to resolve their quarrel, on the one hand, and, on the other hand, arbitration (and litigation) in which the arbitrator (or judge) inflicts on the parties a decision of the subject in dispute.
  6. The adversarial nature of the training and general experience of most lawyers, arbitrators and judges can sometimes make it more difficult for them than for others to be effective as mediators/conciliators.

 Conclusion

Arbitration has been accustomed habitually for the settlement of protests between membership of import clubs and between unlike exchanges in the securities and commodities trade. Many contracts hold a benchmark arbitration clause, referring to the arbitration governs of the respective organization. Numerous arrangements between the parties in industry and industries also supply for the arbitration of controversies stemming out of contracts for the sale of manufactured products, for terms of service of employment, for building and engineering ventures, for financial operations, for agent and distribution arrangements, and for a lot other undertakings.


align=”left” size=”1″ />

[1] Id. Compare Burchell to this expansive view of the arbitrator’s authority in Muldrow v. Norris. 2 Cal. 74, 77 (Cal. 1852) (“[A]rbitrators are not bound to award, on principles of dry law, but may decide on principles of equity and good conscience, and make their award ex aequo et bono [according to what is just and good].)

[2] The U.K. position under Arbitration Act 1996 is almost identical to the New Zealand position in that it also

provides for appeals of law arising from an arbitral award to the High Court. Unless the parties exclude the operation

[3] Retrieved from http://www.businesslaws.boi.gov.bd/index.php?option=com_eregistry&task=lawdetails&law_id=179&controller=law&Itemid=60&lang=en

Retrieved on 02-12-2011

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