The Types of Arbitrations
The Indian Arbitration and Conciliation Act, 1996 applies to both domestic arbitration in
India and to international arbitration. Section 2(1)(f) of the Act defines "International
Commercial Arbitration" as arbitration relating to disputes arising out of legal
relationships, whether contractual or not, considered as commercial under the law in
force in India where at least one of the parties is:
1. an individual who is a national of, or habitually resident in any country other than
India; or
2. a body corporate which is incorporated in any country other than India; or
3. a company or an association or a body of individuals whose central management
and control is exercised in any country other than India; or
4. the Government of a foreign country.
5. Types of arbitration and their importance
Dear All,
There are two types of Arbitration:
1. Voluntary Arbitration
2. Compulsory Arbitration
Voluntary Arbitration is a binding, adversarial dispute resolution process in which the
disputing parties choose one or more arbitrators to hear their dispute and to render a final
decision or award after an expedited hearing
Voluntary arbitration implies that the two contending parties, unable to compromise their
differences by themselves or with the help of mediator or conciliator, agree to submit the
conflict/ dispute to an impartial authority, whose decisions they are ready to accept. In
other words, under voluntary arbitration the parties to the dispute can and do they refer
voluntarily and dispute to arbitration before it is referred for adjudication. This type of
reference is known as “voluntary reference”, for the parties themselves volunteer to come
to a settlement though an arbitration machinery.
The essential elements in voluntary arbitration are :
§ The voluntary submission of dispute to an arbitrator.
§ The subsequent attendance of witnesses and investigations.
§ The enforcement of an award may not be necessary and binding because there is no
compulsion.
§ Voluntary arbitration may be specially needed for disputes arising under agreements.
Compulsory Arbitration is a non-binding, adversarial dispute resolution process in which
one or more arbitrators hear arguments, weigh evidence and issue a non-binding
judgment on the merits after an expedited hearing. The arbitrator's decision addresses
only the disputed legal issues and applies legal standards. Either party may reject the
ruling and request a trial de novo in court.
Compulsory arbitration is one where the parties are required to accept arbitration without
any willingness on their part. When one of the parties to an industrial dispute feels
aggrieved by an act of the other, it may apply to the appropriate government to refer the
dispute to adjudication machinery. Such reference of a dispute is known as “compulsory”
or “involuntary” reference, because reference in such circumstances does not depend on
the sweet will of either the contending parties or any party to the dispute. It is entirely the
discretion of the appropriate govt. based on the question of existing dispute, or on the
apprehension that industrial dispute will emerge in particular establishment.
Under compulsory arbitration, the parties are forced to arbitration by the state when:
§ The parties fail to arrive at a settlement by a voluntary method
§ When there is a national emergency which requires that the wheels of production
should not be obstructed by frequent work-stoppages
§ The country is passing through a grave economic crisis
§ There is a grave public dissatisfaction with the existing industrial relations
§ Public interest and the working conditions have to be safeguarded and regulated by the
state.
Compulsory arbitration leaves no scope for strikes and lock-outs; it deprives both the
parties of their very important and fundamental rights.
6.
Attribution: http://www.citehr.com/91631-types-arbitration-their-
importance.html#ixzz21PoNX5G9
