Explained: Arbitration Process in India | Rohit Pradhan

Summary

This video explains the entire arbitration process from start to finish. It covers the importance of including an arbitration clause in contracts, the steps to initiate arbitration, and the role of the arbitrator in resolving disputes. The video also addresses practical issues such as securing assets through court orders, handling disagreements over arbitrator nominations, and the process of filing statements of claim and defense. Finally, it touches on how to challenge an arbitral award in court. The goal is to provide a comprehensive yet digestible understanding of arbitration in India.

Takeaways

• 😀 Arbitration is an alternative dispute resolution method that helps resolve disputes outside the overburdened court system.
• 😀 Businesses use arbitration clauses in contracts to avoid long court procedures and ensure quicker resolution of disputes.
• 😀 An arbitration clause in an agreement ensures that, in case of a dispute, both parties will choose arbitration instead of going to court.
• 😀 In case of risk to assets or funds during a dispute, parties can secure them through a court order under Section 9 of the Arbitration Act.
• 😀 The arbitration process starts with issuing a notice, stating the dispute, and nominating an arbitrator if the agreement doesn't specify one.
• 😀 If the opposing party disagrees with the nominated arbitrator, the matter can be escalated to the High Court under Section 11 of the Arbitration Act for the appointment of an impartial arbitrator.
• 😀 The claimant submits a Statement of Claim and the respondent submits a Statement of Defense, both of which form the basis of the arbitration proceedings.
• 😀 Both parties can present evidence and witnesses, and cross-examine each other to strengthen their case before the arbitrator.
• 😀 The arbitrator reviews the case and issues a binding arbitral award, which has the same authority as a court judgment.
• 😀 If the arbitral award is unfavorable, the aggrieved party can challenge it in a district court (domestic arbitration) or high court (international arbitration) under Section 34 of the Arbitration Act.

Q & A

What is arbitration and why do businesses prefer it over going to court?

Arbitration is a process where disputes are resolved outside of court by an appointed arbitrator. Businesses prefer it because courts in India are overburdened, and litigation can take years. Arbitration is a quicker, more efficient, and cost-effective alternative.

What is the first step in the arbitration process?

The first step is ensuring that there is an arbitration clause in the agreement. This clause dictates that in case of a dispute, the parties agree to resolve it through arbitration rather than litigation.

Can a party secure money or property before starting arbitration?

Yes, under Section 9 of the Arbitration Act, a party can approach the Civil Court to secure money, goods, or property before invoking arbitration, especially if there is a concern that the other party might escape with the assets.

What is the purpose of invoking arbitration with a notice?

The notice outlines the dispute and reminds the other party that they agreed to resolve disputes via arbitration. It also allows the party invoking arbitration to nominate an arbitrator, unless the agreement specifies otherwise.

What happens if the other party disagrees with the nominated arbitrator?

If the other party disagrees with the nominated arbitrator, the party invoking arbitration can approach the High Court under Section 11 of the Arbitration Act. The High Court will appoint an impartial arbitrator to resolve the dispute.

What is the Statement of Claim and who submits it?

The Statement of Claim is a document submitted by the claimant (the party initiating arbitration) that outlines their claims, supporting evidence, and arguments. It serves as the basis for the arbitration proceedings.

What is the role of the Statement of Defense in arbitration?

The Statement of Defense is submitted by the respondent (the opposing party). It outlines the respondent's defense against the claimant's allegations and presents their side of the story with supporting evidence.

Can the claimant respond to the Statement of Defense?

Yes, the claimant has the option to respond to the Statement of Defense. If they choose to do so, they submit a rejoinder that addresses the defense raised by the respondent.

What happens after the submission of written statements in arbitration?

After the written statements (Statement of Claim, Statement of Defense, and Rejoinder) are submitted, both parties may present witnesses and engage in cross-examination. This helps strengthen their respective cases before the arbitrator.

What is the arbitral award, and what can be done if a party disagrees with it?

The arbitral award is the decision made by the arbitrator at the end of the process, which is binding on both parties. If a party disagrees with the award, they can challenge it in court under Section 34 of the Arbitration Act, either in a district court (for domestic arbitration) or a High Court (for international arbitration).