Arbitration is not a Court of Law: Examine the various features of Arbitration and distinguish it with the mechanism of court. Evaluate.
In accordance with one of the supreme philosopher Aristotle – “For an arbitrator goes by the equity of a case, a judge by the law, and arbitration was invented with the articulate purpose of securing full supremacy for equity.”The cost of court case is increasing day by day and businesses require a range of alternatives for the resolution of those disputes. Arbitration has become a more admired dispute resolution alternative because of cost efficacy which is assured by law. Parties involved in the resolution have a degree of freedom. As a result arbitrators come from various background and professions for the dispute resolution. Arbitration procedures offer to resolve their dispute s privately at a minimum cost. After the completion of the arbitral proceedings, an award is issued that takes the dispute to the end. Disagreeing parties do not need to experience the repercussions of further appeal procedures on the basis of the award.
DEFINATION OF ARBITRATOR
Arbitrators are nominated judges who are approved by the conflicting parties involved in the dispute. Arbitrators conduct the arbitration and serve as private extraordinary judges in the trial. In almost all the cases arbitrator remains an attorney or retired judges or businesspeople who have been selected and approved by both the parties Arbitrators are empowered with the arbitrary power. On the basis of which they come up with their sentences, which are known as awards. Arbitrators who are professional are paid with a attractive amount as remuneration. American Arbitration Association has a jury of attorneys who serve as arbitrator. There are also arbitrators who are regarded as proficient from construction to marine smash up. So, arbitrators are the persons for the resolution of the dispute approved and selected by the conflicting parties involved in the dispute.
FINDING AN ARBITRATOR
Attorneys, former judges and lawyers are at the peak of the list of arbitrators with specialized knowledge. But there are no legal obligations regarding arbitrators that they are required to be qualified and specialized in law. In other cases non-lawyer people who are educated about any required industry are also recruited as arbitrators. Certified arbitrators are independent service provider, who work in a renowned alliance and they are dedicated in the field of arbitration. The arbitrators are bound to follow the regulations and ethics in the code of conduct of that association and are castigated for the violation of the existing rules.
ARBITRATOR SKILL AND KNOWLEDGE
Arbitrators should be experienced in specific field of any industry and should have the following skills and knowledge:
· Expertise in various dispute resolution methods
· Capability to conduct victorious conference and settle probable solutions.
· Ability to assess multifarious and procedural information.
· Proficient communication and listening skill.
· Utilizing logical understanding to identify strength and weakness of various solution procedures
· Persuading others to revolutionize their consideration.
· Adjusting actions in the context of others activity.
· Monitoring performance of individuals.
ARBITRATOR PERSONAL QUALITIES
Arbitrator must have the following personal qualities:
· Arbitrator should be serene, objective and self-assured.
· Non- judgmental and neutral.
· Ability to generate reliance in others mind.
· Capability to maintain information off the record.
· Ability to narrate people from various environment, society and ethnicity.<href=”#_ftn1″ name=”_ftnref1″ title=””>
ARBITRATOR TASK AND DUTIES
The task and duties of an arbitrator are described in the following:
· Conflicting parties will apply to the arbitrator for the solution of the dispute.
· Separate time distribution for the disagreeing parties to come up to a solution.
· Listen to both the conflicting parties.
· Regard as on paper information provided by both the parties.
· Make decision being impartial based on the evidences and proofs and resolve the argument.
NUMBER OF ARBITRATORS
In arbitration the conflicting parties should agree about the number of arbitrators who are going to resolve their dispute among the conflicting parties. Chapter 4 of the Arbitration Act, 2001 talks about the composition of the arbitral tribunal. According to that act the number of arbitrators in any arbitral tribunal will be three but the conflicting parties are free ti determine the number of arbitrators. If the conflicting parties fail to determine the number of arbitrators the tribunal will be formed by three arbitrators.
APPOINTMENT OF ARBITRATORS
Appointment of arbitrators is very important in an Arbitral Tribunal. Chapter 4 of the Arbitration Act, 2001 refers about the appointment of arbitrators.If the tribunal wants to have even number of arbitrators, the appointed arbitrator is requested to appoint the other arbitrators to act as chairman of the Arbitral Tribunal panel. One party can request another party to appoint a sole arbitrator which has to accepted by the another party within 30 days of that request. If the tribunal consists of three arbitrators, every party will appoint one arbitrator each and both the nominated arbitrator will appoint the third arbitrator to conduct the tribunal panel as a chairman.Both the conflicting parties will choose a system for the mode of appointment of the arbitrators.If both the parties are agreed, arbitrator from any nationality can be appointed.There is a default provision, which allows matters relating to the appointment of an arbitrator,or a third arbitrator to be referred to the appropriate court within 30 days.
RIGHT TO CHALLENGE THE ARBITRATOR
Section 13 of the arbitration act deals with the how an arbitrator can be challenged. The appointed arbitrator will announce to the conflicting parties which causes can create doubt in the mind of the both the parties about the neutrality and freedom of the arbitrator. In India it has been observed that the Arbitral Tribunal can always be challenged if it is against the arbitration agreement.
ARBITRATORS ARE NOT JUDGES
Arbitration complements the judicial system as arbitration provides comparatively quick and cheap and specialized decision making. Arbitrators are not specialist judges and are not proficient in the law. Arbitrators can make mistake easily that is not possible by the judges. In case of judgment the judges relate the law of that sovereign country whereas arbitrators are concern about the law of shop. Arbitrators were more apposite to solve difficult and labor management cases as a result arbitration became famous. The judges are familiar with the law but only law was not enough to solve these critical situations. Arbitrators do not need to obtain instruction in the law; yet they have the significant accountability of implementing constitutional privileges. But judges are accountable to the law and if they misuse the law they will have to face the legal review. Arbitrators relate the law of the shop to meet the requirements of the conflicting parties because arbitrators are bound to resolve the problem of the conflicting parties. Arbitrators have the authority to settle on the disputes.
Arbitrators are engaged in other activities after they serve as arbitrator. Arbitrators are nominated from the relevant fields of industry in order to relate specialized knowledge to solve the dispute. Arbitrators are not accountable to the law of any country. They do not have proper knowledge of law to resolve any problem but they have relevant experience in that field. Arbitrators do not have to justify the reason of their decision.
Arbitrators work with alternative dispute resolution where as judges apply the law in a legal process and are accountable to the statutory law. Arbitrators settled down cases outside the court but judges apply their legal knowledge to solve a case inside the court. In arbitration all hearings are private and confidential as well but judges decide about any dispute in public. Arbitrators do not require any license where as judges require judicial appointment for any decision of court. Arbitrators work in private places where as judges’ work in court rooms. So from the above discussion it is clear that arbitrators are not judges. Arbitrator and judge are two separate judicial terms and their activities are not the same.
DEFINATION OF ARBITRATION
Arbitration is an informal pattern of dispute resolution which is conducted by a panel of 1 or 3 persons who are not judges but nominated by both the conflicting parties to resolve their dispute outside the court. It is like a mini- trial that settle down disputes to avoid the court trial through a less expensive and efficient time management. The tribunal panel consists of experienced persons from relevant field to conduct the tribunal. Arbitrators are listen both the conflicting parties and come up with a well accepted solution that is known as award and both the parties must accept the award made by the arbitral panel. Arbitration is a legal technique which is most popularly used in the resolution of business disputes all over the world. In other countries it is also used to solve labor disputes, consumer proceedings or family disputes. Arbitration is also used for the resolution between nations and also between investors and countries. As Lord Saville commented:
“… Arbitration has this in common with the court system; both are a form of dispute resolution which depends on the decision of a third party … Since the state is in overall charge of justice, and since justice is an integral part of any civilized democratic society, the courts should not hesitate to intervene as and when necessary, so as to ensure that justice is done in private as well as public tribunals ….” (Emphasis added)
REASON OF ARBITRATION
Arbitration is a non court contractual agreement through which the conflicting parties can agree about important aspect regarding the dispute. Arbitration is regarded as more acceptable practice because both the conflicting parties have a superior possibility to be heard. It is regarded an substitute to court room proceedings. Arbitration saves the time and expenditure involved in the process of court case. It is also an informal procedure both the conflicting parties remain in less anxiety regarding the resolution of the proceedings. Arbitration uses rules of verification and course of action in a less recognized way than those are followed in the trial court that leads to a less costly and rapid resolution of disputes.
Arbitration is the process through which a disagreed problem is brought if front of experts or experienced entity that work as arbitrators to resolute the problem and make decision about the dispute which is known as award. The judicial process is described in the following:
FILING AND INITIATION
Arbitration starts when one of the conflicting parties submits their demand for the arbitration and another party is informed about that. A date is then fixed for their answer.
Both the conflicting parties then select arbitrator by them. Then the third arbitrator is determined by both the nominated arbitrator by the parties.
As a first step the arbitrators start a preliminary hearing with both the parties to dicuss about the dispute and also about the witness.
INFORMATION EXCHANGE AND PREPARATION
Then both the disagreed parties start to exchange their information and prepare for the witness presentation.
In the hearing both the parties come up with their witnesses and submit their speech in front of the arbitrator.
POST HEARING SUBMISSION
When the preliminary hearing is finished both the parties submit additional information if the previous information does not work for them.
Finally the arbitrators come up to an end after hearing both the parties with their witnesses, speech etc. The final decision is made that must be accepted by both the conflicting parties which is known as award.
ARBITRATION LAW IN BANGLADESH
Arbitration has always been a popular type of dispute resolution in Bangladesh and traditionally the rural community mass would determine their village proceedings within their area in an informal manner. “The Arbitration (Protocol and Convention) Act 1937” and the “Arbitration Act 1940” approved by the United Kingdom congress enclosed the officially authorized structure for arbitrations throughout the times of the British India and sustained at the time of separation of Pakistan and India in 1947 in those countries and in Bangladesh at the time of its independence in 1971.
‘The Arbitration Act 2001’ restrains the legal structure for all forms of arbitration like domestic or international or labor or family or consumer disputes. The Act came into force on 10 April 2001and it became effective in respect of all disputes referred to arbitration after this date. ‘The Arbitration Act 2001’ was amended in a number of respects in 2004. The modification was essential for overseas investment in natural gas, power and export business with other countries of the world.
The Act is a replica of the UNCITRAL model law but it does not enclose precisely the same wording as applied in the model law. Many distinctive terms have been drawn from the Indian Arbitration and Conciliation Act 1996 and some from the English Arbitration Act 1996. There includes many significant articles of UNCITRAL which are espoused with changes in the Act, such as: Article 5Article 8, Article 10, Articles 11, 13, 14, Article 16, Article 17 (in the Indian Arbitration and Conciliation Act 1996 (“IACA”), section 9 (ii)), Article 18, Article 34 Articles 35 and 36 and numerous editorials.
Arbitral tribunal awards are changeable and superior to arbitration awards. But because arbitration awards are private, it is not possible to carry out a specified assessment.
Arbitration is quicker than court procedure because it is held outside the court and arbitrators try to resolute the dispute in a more professional manner.
In arbitration, advocate can reduce innovation expenses. In court procedure the payment of the renowned barristers are comparatively higher. That is not possible to continue by the mass people. But in arbitration arbitrators finishes the procedure in a quicker manner that’s why it is a cost efficient approach.
CHOICE OF A DECISION MAKER
In court the judges are experienced in law but arbitrators are not accountable to the law but they are experienced in specific field of an industry. So the conflicting parties have a choice to nominate their decision maker of the award.
Arbitration is a legal procedure bit it is private. As a result the information provided in the hearing is kept confidential. But in litigation information are announced in the public and the decision are published in front of the people. So arbitration is a confidential approach.
INFORMAL RULES OF EVIDENCE
If both the conflicting parties do not agree, the rules of substantiation do not apply to arbitration. As a result one party may lose the dispute in arbitration that would have been won in the court case in the court.
In arbitration chance of discovery is limited. As a result arbitrators in the arbitration process suffer from lack of tools that would be available in the court case. As a result the arbitrator cannot easily weigh up the case properly for trial.
NO GUARANTEE OF EXPERT
Arbitrators do not need o know the law for the completion of the arbitral process. Any expert from any industry can be appointed as arbitrator. Arbitrators use their knowledge and skill for the resolution of the dispute. But it is not sure that the arbitrators will be exact expert for that specific arbitration.
FORMAL REQUIREMENT FOR AN ARBITRATION AWARD
In any arbitration, the award of the arbitrator should be written and signed by the arbitrators.<href=”#_ftn4″ name=”_ftnref4″ title=””> In case of arbitral tribunal formed by more than one arbitrator then all the arbitrators need to sign in the award paper rather the award shall not be valid further. The award shall not be worthless for not signing by the unorthodox minority members of the arbitral tribunal.If the parties are unless agreed the tribunal should provide reasons in the award. But if the conflicting parties are agreed in the award then the tribunal need not provide reasons in the award. The award need to be dated by the tribunal and the place of writing the award also must be mentioned according to Section 26.
ARBITRATION DEVELOPMENT IN BANGLADESH
The environment of Bangladesh has been changed due to the arbitration act and Bangladesh will be more arbitration friendly in his upcoming days. Court has already started to deal with the arbitration applications more professionally and has started to interfere less in arbitration. We are reaching to a matured condition in case of arbitral dispute resolution. The ICSID resolution in Saipem v Bangladesh is supposed to be confronted by Bangladesh but that result makes the courts of Bangladesh and in the emergent countries in South and South East Asia more susceptible while dealing with global business arbitrations.
HOW LONG DOES ARBITRATION TAKES PLACE
In arbitration cases are settled within 10 hours (1 schedulable calendar day). Many of the cases can be settled down within 5-6 hours that means within 1 or half billable day.
COURT OF LAW
Court of law means any tribunal in the judicial structure. In the judicial system court is the only place where people can get the appropriate verdict of their litigation. Court of law is one of the organs of the government that determine the appropriate justice based on the litigation or other court decision made before. It’s the only part of the government that appropriately apply the rules for the betterment of the people and for the betterment of the society as well.
ARBITRATION IS NOT A COURT OF LAW
Arbitration is comparatively an easier process for the resolution of dispute all over the world. In arbitration both the parties may choose their panel of arbitrators who will make the final decision about their dispute. But in a court there is a single judge who listen both the parties and prepare the final verdict for both the conflicting parties. So there is a little bit difference between arbitration and court of law and both are not the same.
Arbitration is a system which is private and conducted privately by the nominated judges of the conflicting parties but court decisions are public and held publicly inside the court room. Arbitration is the system which is very fast and less amount of harass and after the hearing has been finished the award is given very quickly. So arbitration is a very faster and easier process in comparison to court. The cost of arbitration is comparatively low as it’s a faster process. But in the court the overall cost of any proceedings include fee of lawyers and court as well, which tend to be comparatively higher.
Arbitration does not allow the huge presence of evidence and there is limited permission of evidence. In the court proceedings both the parties try to present all types of evidences in front of the judge and the judge decide based on the evidences presented by both the conflicting parties. In a court case there is full chance of appeal for the parties but in arbitration (binding) unless the clause of appeal is not included in the award there is no chance of legal appeal available for the parties. So, from the above discussion we can reach to a conclusion that arbitration is not a court of law.
Arbitration is a form of alternative dispute resolution process which is very popular all over the world. Different types of legal disputes like commercial, international disputes can be easily resolute through arbitration which is an easier and cost effective approach. Arbitrators can be easily selected by the conflicting parties. Arbitrators and judges are not the same, both are different. Judges provide their judicial decision in the public court. Court is always an overcrowded place which is public and court of law is different from arbitration in terms of cost, speed, arbitrator’s selection process, evidence and appeal. So, it can be stated that, arbitrators are not judges and arbitration is not a court of law.
Albin, C. (2001). Justice and fairness in international negotiation. Cambridge [England];
New York, Cambridge University Press.
Arnold, T. (1995). “A Vocabulary of Alternative Dispute Resolution.”
Bansal, A.K. Arbitration In Bangladesh, Available at www.lawcafe.in [accessed July 18, 2012]
CPR (2001). ADR Suitability Guide (Featuring Mediation Analysis Guide).
New York, CPR Institute for Dispute Resolution.
David, R. (1985), Arbitration in international trade
Dezalay, Y. & Bryant, G. (1998), Dealing in Virtue: International Commercial Arbitration
and the Construction of a Transnational Legal Order.
Goldberg, S. B., Frank E.A. Sander, et al. (2003 4th.ed). Dispute Resolution;
Negotiation, Mediation, and Other Processes. New York, NY,.
Jhunjhunuwal, S. M., & Saraf, B. P., (2006), Justice, Law of Arbitration And
Conciliation, Fourth Edn. Snow White Publications Pvt. Ltd.
Lew, J. & Kroell, S. (2006), Comparative International Commercial Arbitration
Maniruzzaman, A. F. M. (2004), Bangladesh Embraces the UNCITRAL Model law
On Arbitration, MEALEY’S International Arbitration Report, Vol. 19.
Maniruzzaman, A.F.M. (2006), The New Law of International Arbitration in Bangladesh,
The American Review of International Arbitration, Vol.14
Messick, R. E. (2005). Alternative Dispute Resolution: When It Works, When It
Doesn’t. Washington, DC.
Niemic, R. J., Stienstra, D. et al. (2001). Guide to Judicial Management of Cases in
ADR, Federal Judicial Center.
Redfern, A.& Hunter, M. (2004), Law and Practice of International Commercial
Respondek, A. (2011), Asian Arbitration Guide, Respondek & Fan Pte Ltd, Singapore
Sherk, W. (2006), Arbitration Fairness Proposed, available
at www.bankruptcynetwork.com/arbitration [accessed July 21, 2012]
USAID (1998). Alternative Dispute Resolution Practitioners Guide. Washington, DC, USAID.
Varady, T., & J. Barcelo, (2006). International Commercial Arbitration, 3rd Edn
<href=”#_ftnref1″ name=”_ftn1″ title=””>http://www.careers.gov.nz/default.aspx [accessed July 14, 2012]
<href=”#_ftnref2″ name=”_ftn2″ title=””> Section 12 (1) of the Act
<href=”#_ftnref3″ name=”_ftn3″ title=””> Each party be given a full opportunity of presenting his case
<href=”#_ftnref4″ name=”_ftn4″ title=””> Section 38 of the Arbitration Act/ AIR 1962 Raj 231 (DB)
<href=”#_ftnref5″ name=”_ftn5″ title=””> 1977 SCMR 154.