What is Arbitration?

Arbitration is the method of concluding the dispute between parties that is decided by the third neutral party. That neutral party is known as an arbitrator or panel of arbitrators. A matter of arbitration is decided to keep in mind the principles of natural justice and the laws related to arbitration. It is one of the most successful ways of resolving the dispute between parties. The International Commercial Arbitration is one of the ways of arbitration in which parties from two different countries are involved. The arbitration proceedings can be conducted at a common institution (institutional arbitration) or through ad-hoc arbitration.

As the parties in ICA are from different countries, it becomes important to have a specific set of arbitration rules and regulations which will be followed during the arbitration process. The features which affect most of the proceedings of ICA are efficiency, cost, and procedural fairness. The factor of efficiency raises the question that whether the proceedings of arbitration are efficient enough to resolve the dispute between the parties? What is the amount of the cost involved in the arbitration proceedings? Do the proceedings of arbitration follow the due process of laws?

Factors of Efficiency

The factor of the efficiency depends upon many factors such as the appointment of arbitrators, conduct of arbitration proceedings, etc. The parties involved in the ICA are concerned about the high cost/expenses of the arbitration proceedings. The cost pertaining to the arbitration proceedings mostly depends upon the amount that is being claimed. In arbitration proceedings, different types of costs are involved such as an arbitrator’s fee, administrative costs, and registration fees. The cost of the proceedings affects the choice of institutional arbitration.

Also Read: Procedure for Execution of Arbitral Award 

Procedural Fairness

The procedural fairness means to have due process of law or the process in which arbitration proceedings are carried out. It should be in such a way that there shouldn’t be an injustice to any of the parties. One of the important characteristics of procedural fairness is that once the arbitration agreement is made, it is necessary to execute the arbitration proceedings according to that agreement only. It is the arbitrator’s duty to see to it that the process of the arbitration is being carried out fairly and impartially. The arbitrator should treat both the parties in an equal manner and he should ensure that both the parties should get an equal chance to present their case.

UNICTRAL Model

The UNICTRAL (United Nations Commission on International Trade Law) Model Laws depicts the provision for the due process of the arbitration proceedings. Under Article 18 of the UNICTRAL Model Laws, it is mentioned that parties are free to make their own rules subjected to the conditions that some of the provisions need to be mandatorily followed. Article 24(3) of the same Model Laws states that when the statements, documents, and evidence are submitted by a party to the arbitral tribunal then the same has to be communicated to the other party also.

Fairness also requires some degree of efficiency and it also includes the time taken to conclude the dispute. Justice delayed is justice denied. Moreover, without fairness, the arbitral proceedings will not be considered as an effective dispute resolution mechanism. The element of cost and procedural fairness does raise an opportunity in the minds of the people to resolve the dispute through arbitration. The balance between efficiency and procedural fairness has to be met within ICA. The concept of efficiency and procedural fairness should be applied simultaneously and in a proper and reasonable manner. The arbitral awards are final and binding because they can’t be appealed in the Courts. Therefore it is necessary that the objective of arbitration proceeding must be safeguarded.

Also Read: New Wheel of Arbitration 

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