How to obtain the license of Arbitration and Mediation in India.

HOW TO OBTAIN THE LICENSE OF ARBITRATION AND MEDIATION IN INDIA

Author : Prachi Tiwari, Mody University.

 

INTRODUCTION

In our country the system of imparting justice through courts has given rise to certain serious problems like expensive litigation, excessive delays and huge pendency of cases. Thus, it has become very strenuous for marginalized and penurious people to have access to justice. In this situation, it is of utmost importance that our judicial system must find out some mechanism where such grey areas can be organizes effectively and adequately. Alternative Dispute Resolution (ADR) contains the effective mechanism to provide speedy and cost effective justice; it also has the capability to slick the huge arrears of cases to size. Parliament brought a legislation and introduced section 89 and Rules 1-A, 1-B and 1-C to Order X in the Code of Civil Procedure, 1908, so as to make effective use of ADR process. The two vital category of ADR are Arbitration and mediation .

 

ARBITRATION

Arbitration, in a law is one of the important category alternative dispute resolution (ADR), is a mechanism of solving the disputes outside the courts. The parties assent to refer a dispute to arbitration (through agreement or hearing) by one or more persons (the “arbitrators”, “arbiters” or “arbitral tribunal”), and agree to be bound by the decision of arbitration (the “award”). A third party analysis all the evidences in the case and promulgate a decision that is legally binding on both parties to the case and enforceable in the courts. Ordinarily Arbitration used for the purpose of resolving commercial disputes, particularly in connection with international commercial transactions. In certain countries such as the United States, arbitration is also spasmodically used in the matters related to consumer and employment, where arbitration may be authorized by the terms of employment or commercial contracts. Arbitration can be one of two that is voluntarily or mandatory (notwithstanding mandatory arbitration can only hail from a statute or a contract that is voluntarily entered into, where the parties to the dispute assent to hold all existing or future disputes to arbitration, without  knowing exigently what disputes will ever occur) and can be either binding or non-binding. Hypothetically Non-binding arbitration is same to mediation in manner that a decision cannot be imposed on the parties. Howbeit, the primary difference is that in case of mediation, a mediator in order to help the parties struggle and find the golden mean  on which to compromise, on the other hand (non-binding) arbitrator detached itself from the  process of settlement and will only provide a determination of liability and, if convenient, an inkling of the quantum of damages payable. By one explanation arbitration is binding and non-binding arbitration is therefore typically not arbitration. Arbitration is a dispute resolution proceedings by unbiased adjudicator whose decision is agreed by the parties to the dispute, or legislation has decreed, will be final and binding. There are confined rights of review and appeal of arbitration awards.

QUALIFICATION OF ARBITRATOR

The agreement executed by the parties has to be given great importance. An agreed procedure for appointing the arbitrators has to be given preference to any other mode for securing appointment of an arbitrator. If the procedure for appointment as agreed between the parties fails and an application is filed in court for appointment, the court cannot ignore provisions contained in Clause (a) of Sub-section (8) of section 11 of the Act wherein it is specifically provided that the Chief Justice or the person or institution designated by him, in appointing an arbitrator, shall have due regard to any qualifications required of the arbitrator by the agreement of the parties{1} A clause in the agreement providing for settling the dispute by arbitration through arbitrators having certain qualifications or in certain agreed manner is normally adhered to by the courts and not departed with unless there are strong grounds for doing so{2} . The appointment of an arbitrator can be challenged by a party on the ground that he does not possess the qualification agreed to by the parties {3}. Such challenge has to be brought within 15 days after becoming aware of the constitution of the arbitral tribunal or after becoming aware of the circumstance that he does not possess the necessary qualification {4}.

 

NAMED PERSON OR AUTHORITY AS AN ARBITRATOR

The parties to an arbitration agreement may agree to refer their disputes to a specific person and may either name him or give his designation in the agreement. For example, parties may state that the “Chief Engineer” of the department shall act as the arbitrator. If the person named therein or person holding the designation refuses to act as arbitrator and the parties have not intended that the vacancy should not be supplied, in that event the court will have jurisdiction to appoint another arbitrator.{5}

 

MEDIATION

Mediation is the second method of resolving disputes without addressing to the courts. In this process a neutral third-party uses its specialized communication and negotiation tactics to help the parties in achieving their declared objectives, therefore It is a well organized, voluntary and interactive negotiation process. As a party-centered process, it basically target on the need, rights and interest of the parties, hence it is a party-centered process. In mediation, the parties posses the right to decide for themselves whether to settle a dispute and the terms of any settlement. Mediation is also voluntary. The parties possess the right to decide for themselves whether or not to settle a dispute and the terms of settlement of the dispute. The decision to settle and the terms of settlement always in the hand of the parties even though the court has referred the case for the mediation or if mediation is referred under a contract or a statute. This right of self-sufficiency is an essential ingredient of the mediation process. It ends with a settlement which is created by the parties themselves and is, therefore, acceptable to them. The parties have excessive control over the outcome of mediation. Any party may withdraw without giving any reason from the mediation proceedings at any stage before its termination.

 

QUALIFICATION OF MEDIATOR

The following persons shall be treated as qualified and eligible for being enlisted in the panel of mediators under Rule 3, namely:{6}

  • (i) Retired Judges of the Supreme Court of India;

(ii) Retired Judges of the High Courts;

(iii) Retired District and Sessions Judges or retired Judges of the City Civil Court or Courts of equivalent status.

  • Legal practioners with at least fifteen years standing at the Bar at the level of the Supreme Court or the High Court; or the District Courts or Courts of equivalent status.
  • Experts or other professionals ; or retired senior bureaucrats or retired senior executives;
  • Institutions which are themselves experts in mediation and have been recognized as such by the High Court.

 

LEGAL RECOGNITION OF ARBITRATION AND MEDIATION IN INDIA

The concept of mediation received legislative recognition in India for the first time in the Industrial Disputes Act, 1947. The conciliators appointed under Section 4 of the Act are ” charged with the duty of mediating in and promoting the settlement of Industrial disputes.” Detailed procedures were prescribed for conciliation proceedings under the Act.{7}

Arbitration, as a dispute resolution process was recognized as early as 1879 and also found a place in the Civil Procedure Code of 1908. When the Arbitration Act was enacted in 1940 the provision for arbitration originally contained in Section 89 of the Civil Procedure Code was repealed. The Indian Legislature made headway by enacting The Legal Services Authorities Act, 1987 by constituting the National Legal Services Authority as a Central Authority with the Chief Justice of India as its Patron-in-Chief.{8}

The Indian parliament enacted the Arbitration and Conciliation Act in 1996, making elaborate provisions for conciliation of disputes arising out of legal relationship, whether contractual or not, and to all proceedings relating thereto.{9}

 

ADVANTAGES  OF ARBITRATION AND MEDIATION

  1. flexibility. In the case of arbitration, the parties possess the flaccidity to choose have far more flexibility to select what procedural and sighting rules will affix their dispute (they are free to choose relevant industry standards, domestic law, the law of a foreign country, etc.).
  2. Select your own Arbitrator or Mediator. Under such process parties are allowed to select the arbitrator or mediator that will overhear their case, generally selecting someone having expertise knowledge in the field involved in the dispute. It is not at all necessary that the arbitrator (or panel members) should be an attorney. Hence the main focus is on issue and not on technical procedural rules. In normal litigation, judges often required the help of expert witnesses to explain extremely complex issues and moreover parties are not allowed to select the judge, hence as compared to litigation arbitration and mediation are speedy process.
  3. reducing the expenses. Attorneys and expert witnesses are very expensive. Under litigation a case may cost thousands of dollars. Alternative dispute resolution generate the benefit of getting the issue resolved faster than would occur at trial – and that means less fees incurred by all parties.
  4. The results can be kept confidential. On one hand most trials and related proceedings are open to the public and the press but in the case ADR The parties can consent that information disclosed during hearings must be kept confidential and cannot be used later even if litigation ensues. The final outcome can also be made private if the parties so stipulate and agree.
  5. Active participation of parties. ADR allow more participation of parties in comparison to litigants. ADR provides opportunity to the parties to tell their side of the story and have more control over the outcome than normal trials overseen by a judge. Many parties desire the opportunity to speak their piece and tell their side of the story in their own words rather than just through counsel.
  6. Stimulates cooperation. ADR permits the parties to work along with arbitrator or mediator to resolve the dispute and come to a mutually acceptable remedy.
  7. Reduce stress. ADR is often less stressful than expensive and lengthy litigation. Most people have reported a high degree of satisfaction with ADR.

 

INDIAN INSTITUTE OF ARBITRATION AND MEDIATION:-

IIAM is dedicated to promote the amicable and fair settlement of disputes. It aims to create an environment in which people can work together to find enduring solutions to conflicts and tensions. IIAM provides a triple level solution for total management of disputes.{10}

IIAM provide facilities for alternative dispute resolution (ADR), which includes international and domestic commercial arbitration, mediation/ conciliation and negotiation and maintains a panel of arbitrators and mediators, who are known for their integrity, impartiality and expertise for arbitration and mediation/ conciliation, for effective resolution of disputes outside court.{11}

IIAM provide facilities for dispute prevention & management (DPM) services, which includes assistance in drafting customized dispute resolution clauses / agreements, ADR counseling, community mediation service etc.{12}

IIAM conducts training / academic programs and workshops on ADR and DPM and provides accreditation for mediators and arbitrators, thereby providing professional neutrals with integrity, impartiality and expertise. IIAM is the only institution in India approved by the International Mediation Institute at the Hague, as a “Qualifying Assessment Programme” (QAP) for IMI Certification for international mediato{13}

CONCLUSION

Hence we can observe that ADR provides many advantages and in many ways is better than litigation. Resulting, many parties choosing ADR (either mediation or arbitration) to resolve their disputes despite of filing or even proceeding with a lawsuit after it has been filed. ADR has also provides the benefit of resolving the disputes even after trial, while an appeal is pending. The started adopting various direction to keep eye on the PSU’s of the central government and their counterpart in the states so that they cannot fight their litigation using money on the fees of counsel etc. once it is clear to all the arbitration and mediation are one of the best alternatives to litigation than it can be used for disposal of cases in larger number.

FOOTNOTES

  • 17 Iron & Steel Co. Ltd. v. Tiwari Road Lines, (2007) 5 SCC 703.
  • 18 Iron & Steel Co. Ltd. v. Tiwari Road Lines, (2007) 5 SCC 703, at page 709.
  • 19 Section 12 (3) (b) of 1996 Act.
  • 20 Section 13 (2) of 1996 Act.
  • State of West Bengal v. National Builders, AIR 1994 SC 200. In Union of India v. Singh Builders Syndicate, (2009) 4 SCC 523, at page 527 it was held that “the object of the alternative dispute resolution process of arbitration is to have expeditious and effective disposal of the disputes through a private forum of the parties’ choice. If the Arbitral Tribunal consists of serving officers of one of the parties to the dispute, as members in terms of the arbitration agreement, and such tribunal is made non-functional on account of the action or inaction or delay of such party, either by frequent transfers of such members of the Arbitral Tribunal or by failing to take steps expeditiously to replace the arbitrators in terms of the arbitration agreement, the Chief Justice or his designate, required to exercise power under Section 11 of the Act, can step in and pass appropriate orders”.
  • Rule 4 of Part-II of Alternate Dispute Resolution and Mediation rule, 2003
  • BY AJAY THAKUR ,What every Indian should know about mediation (https://blog.ipleaders.in/indian-should-know-about-mediation/),visited on 14-march2017
  • Supra
  • supra
  • https://www.transnational-dispute-management.com
  • Supra
  • Supra
  • supra

 

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