Arbitration and Conciliation – A Love Story

Article for Blog Post Writing Competition 2011 | by Vikrant Shetty


June 1st, 20112:28 pm


When will mankind be convinced and agree to settle their difficulties by arbitration?

BenjaminFranklin

conciliationLaws of arbitration and conciliation are given by the Arbitration and Conciliation Act of 1996. You may wonder why I have referred to them as ‘A love story’. Reason is that they are the most efficient peaceful methods of resolving disputes. Especially in conciliation not much hatred remains between the parties after the dispute has been resolved. Explanation of that is given below…

ARBITRATION:

Arbitration, a form of alternative dispute resolution, is a method for the resolution of disputes outside the courts, where the parties to a dispute refer it to one or more persons for deciding. Best way to explain arbitration is by the example of the story of two cats fighting for a cake, until they present their problem before a monkey who they mutually decide should resolve the matter. Here the cats were the parties, the monkey was the arbitrator and the cake was the award.

‘The Cake’: The decision of the arbitrators is called ‘the arbitral award’. Arbitrator must decide the dispute ex aequo et bono (In justice and in good faith) The decision of Arbitral Tribunal will be by majority. The award must be in writing and signed by the members of Arbitral Tribunal. It must state the reasons for the award unless the parties have agreed that no reason for the award is to be given. However, the award is enforceable in court.

Appointment of ‘The Monkey(s)’– The parties can mutually agree on a procedure for appointing the arbitrator or arbitrators. The parties shall mutually appoint a sole Arbitrator to resolve the dispute. In the event that the Parties are unable to agree upon a sole Arbitrator, the dispute shall be referred to a panel of three Arbitrators, each Party nominating one and the third Arbitrator being appointed by the two Arbitrators so nominated by the Parties. If one of the parties do not appoint an arbitrator within 30 days, or if two appointed arbitrators do not appoint third arbitrator within 30 days, the party can request Chief Justice to appoint an arbitrator. [section 11(4)]. The Chief Justice can authorize any person or institution to appoint an arbitrator. [Some High Courts have authorised District Judge to appoint an arbitrator]. In case of international commercial dispute, the application for appointment of arbitrator has to be made to Chief Justice of India. In case of other domestic disputes, application has to be made to Chief Justice of High Court within whose  jurisdiction the parties are situated.

CONCILIATION:

Conciliation, just as the name suggests, is when the parties come together in the presence of a conciliator who tries to strike a mutual agreement between them. The parties are under no obligation to do anything he says. He can only suggest, advice and convince the parties. However when a mutual agreement is made between the parties it has the same status as of an arbitral award. Conciliation differs from arbitration in that the conciliator usually has no authority to seek evidence or call witnesses, usually writes no decision, and makes no award. The conciliator has to do the work simply by lowering tensions, improving communications, interpreting issues, providing technical assistance, exploring potential solutions and bringing about a negotiated settlement. Most effective conciliators are greatly accomplished negotiators.

One of the greatest advantages of conciliation is that the end result in conciliation is acceptable to both parties since it is not imposed like an award or decree and the parties usually still maintain a good relation after the dispute is resolved.

 

Article by-

Vikrant Shetty

Student, Rizvi Law College, Mumbai

[Submitted as an entry for the MightyLaws.in Blog Post Writing Competition, 2011]

 

(The above article is an original work. However, the image attached with the article is from www.readersandrootworkers.org)

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