Research methods and legal writing

“Role of arbitrator in settlement of legal dispute”

By-: Lalit som

Abstract:
Resolving legal disputes using arbitration has almost become a norm. As stakes
are high, the awards are usually challenged in a court of law. For the award to
come out unscathed through the legal scrutiny process, it is important that the
arbitrators had applied their mind and looked into the matter with the knowledge
of the subject matter of dispute and also with knowledge of law. The role of
arbitrators is critical in the success of using arbitration as a means of dispute
resolution. In this paper we will recognize the role of arbitrators as how it
functions and what are powers/rights and duties of an arbitrator towards the
settlement of any legal dispute presented in front of him.We will also discuss
about various previous cases in which the role of arbitrator is shown and we will
also discuss the advantages and disadvantages of this role in India .

Literature review:-

There is an ample material available on the subject of the preset study by way of
books, law journals, research papers and articles. Though the concept had ancient
base in India, very little work has been done by Indian authors in this field. In the
last few years, many foreign and Indian authors have written valuable article on
this topic.

ARPINDER SINGH & YOGEN VAIDYA,(2012):

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The article , Is India A Preferred Destination For Arbitration? Points out that, with
the new liberal policies and continuous efforts made by the Government, India has
opened doors to foreign investment leading to a spurt in the number of commercial
disputes. In spite of amending the Arbitration Act, there are still few challenges
which need to be addressed with respect to preference for selection of arbitration
institutes, Indian regulations, interference by the courts, enforcement of foreign
award of the arbitrator and involvement of the experts in the arbitration
proceedings. The author analyses the key challenges faced in establishing
arbitration as an alternate dispute resolution method in India.

SUJAY DIXIT, (2011)

The author in this article ,ADR Mechanism In India points out that the technique of
ADR is an effort to design a workable and fair alternative to our traditional judicial
system. In a developing country like India with major economic reforms underway
within the framework of the rule of law, strategies for swifter resolution of disputes
for lessening the burden on the courts and to provide means for expeditious
resolution of disputes, there is no better option but to strive to develop alternative
modes of dispute resolution (ADR) by establishing facilities for providing settlement
of disputes through arbitration, conciliation, mediation and negotiation. The author
in this article looks at the advantages of Indian Arbitration Act.

BHARTENDU YADAV, (2011)

The article, the Role Of Courts In Arbitration points out that ,the purpose of
Arbitration Act is to provide quick redressal to commercial disputes by private
Arbitration. Quick and final resolution of any commercial dispute by private
Arbitration. Quick and final resolution of any commercial dispute is necessary for
smooth functioning of business and industry. This article aims to analyze the
position of the Indian Arbitration Act, as to the finality of the resolution of disputes,
when the parties choose arbitration as the mode of dispute resolution and the role
of courts on such decisions.

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 Introduction

Arbitration is a procedure in which a dispute is submitted, by agreement of the

parties, to one or more arbitrators who make a binding decision on the dispute. In
choosing arbitration, the parties opt for a private dispute resolution procedure instead
of going to court.

Its principal characteristics are:

 Arbitration is consensual

Arbitration can only take place if both parties have agreed to it. In the case of future
disputes arising under a contract, the parties insert an arbitration clause in the
relevant contract. An existing dispute can be referred to arbitration by means of
a submission agreement between the parties. In contrast to mediation, a party cannot
unilaterally withdraw from arbitration.

 The parties choose the arbitrators

Under the WIPO Arbitration Rules, the parties can select a sole arbitrator together.
If they choose to have a three-member arbitral tribunal, each party appoints one of
the arbitrators; those two persons then agree on the presiding arbitrator.
Alternatively, the Center can suggest potential arbitrators with relevant expertise or
directly appoint members of the arbitral tribunal. The Center maintains an extensive
roster of arbitrators ranging from seasoned dispute-resolution generalists to highly
specialized practitioners and experts covering the entire legal and technical spectrum
of intellectual property.

 Arbitration is neutral

In addition to their selection of neutrals of appropriate nationality, parties are able to

choose such important elements as the applicable law, language and venue of the
arbitration. This allows them to ensure that no party enjoys a home court advantage.

 Arbitration is a confidential procedure

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 The WIPO Rules specifically protect the confidentiality of the existence of the
arbitration, any disclosures made during that procedure, and the award. In certain
circumstances, the WIPO Rules allow a party to restrict access to trade secrets or
other confidential information that is submitted to the arbitral tribunal or to a
confidentiality advisor to the tribunal.

 The decision of the arbitral tribunal is final and easy to enforce

Under the WIPO Rules, the parties agree to carry out the decision of the arbitral
tribunal without delay. International awards are enforced by national courts under
the New York Convention, which permits them to be set aside only in very limited
circumstances. More than 140 States are party to this Convention.

Arbitrability of Disputes The Act states that the relationship between the parties
need not be contractual. Hence, a dispute in tort can also be referred.

 The Supreme Court in the case of Renu Sagar Power Co v General Electric
Co14 stated this as follows: The question is not whether the claim lies in tort
but the question is whether even though it has lain in tort it ‘arises out of’ or
is ‘related to’ the contract, that is to say, whether it arises out of the terms of
the contract or is consequential upon any breach thereof. The court in Renu
Sagar I also approved an English decision in the case of Woolf v Collis
Removal Service15 where the Court of Appeal held that though the claim in
negligence was a claim in tort and not under contract, yet there was a
sufficiently close connection between that claim and the transaction to bring
the claim within the arbitration clause. Citing this, the court in Renu Sagar I
continued: this authority clearly shows that even though a claim may not
directly arise under the contract which contains an arbitration clause, if there
was sufficient close connection between that claim and the transaction under
the contract, it will be covered by the arbitration clause. Hence, whether an
action lies in tort or contract, it would lie before an arbitral forum, unless it
can be demonstrated that the cause of action is de hors the contract which
contains the arbitration clause.

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  The case of Man Roland v Multicolour Offset23 : made a significant inroad
into the sanctity of an arbitration agreement. Here the Supreme Court held
that the Monopolies and Restrictive Trade Practices Commission of India
(‘Commission’) would have jurisdiction to entertain a claim for damages
arising out of an alleged ‘unfair trade practice’ (in this case, sale of alleged
defective goods and deficiency in services). The contract between the parties
contained an arbitration agreement providing for arbitration in Paris, under
ICC Rules with German law applying. The Supreme Court held that the
Monopolistic and Restrictive Trade Practices Act 1969 (‘MRTP Act’)
provides for statutory remedies in respect of statutorily defined offences and
these remedies are in addition to the usual remedies available to the parties
under the Contract Act. Hence, the complaint for damages under the MRTP
Act would be maintainable despite an arbitration agreement between the
parties. This case assumes significance, for an ‘unfair trade practice’ is
defined rather widely under the MRTP Act. It includes any ‘unfair or
deceptive practice’ for sale of goods or services. The Indian claimant here
was thus able to bypass the arbitration agreement and sue for damages in
India (with Indian law applying) by adapting the MRTP route.

WHO IS AN ARBITRATOR?

Arbitrators fulfill a crucial role in alternative dispute resolution and specifically in

arbitrations. In this lesson, you will learn what an arbitrator is, what an arbitrator
does and some of the qualifications necessary to be an arbitrator. After the lesson,
you will be given an opportunity to reinforce your knowledge with a short quiz.
Who can become an Arbitrator?

The law does not impose restrictions on who can become an arbitrator, and an
arbitrator does not need to have formal legal training. In fact, where disputes revolve
around a specific industry, the disputing parties’ priority may be to seek to appoint
an arbitrator who has experience in that sector and therefore understands its context
and complexities. Either way, becoming a professional arbitrator is a rigorous
process, involving substantial training and practical experience. In the UK, the
Chartered Institute of Arbitrators trains and accredits practitioners to know and apply
all the relevant laws, and to determine awards based on evaluation of all the evidence
put before them.

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Why Is an Arbitrator Important?
Arbitration is a popular form of alternative dispute resolution that is used by many
individuals and businesses to resolve disagreements in place of pursuing a lawsuit.
Knowing the role an arbitrator plays will help you understand the process and be
more effective if you participate in arbitrations. As one of the most exciting
characteristics of arbitration is that clients have the agency to choose who hears
and determines the outcome of their dispute, how does one make the important
decision of choosing an arbitrator? It is often helpful to consider both an
arbitrator’s legal experience and their field of expertise outside of law. Often
arbitrators are chosen via word of mouth recommendation, however if such an
opportunity doesn’t arise one may find expert directories helpful, such as the one
mentioned below.

WHAT IS THE ROLE OF AN ARBITRATOR?

When arbitration is chosen as a method of resolving a disagreement, the role of the

arbitrator is a very important one. The arbitrator essentially acts as a judge would if
the case went to court. The arbitrator will hear arguments and evidence presented by
the parties involved in the dispute and will make a binding decision to resolve the
disagreement.

For individuals and businesses involved in a dispute that will be resolved through
arbitration, it is essential to have proper legal representation. An experienced San
Diego business law attorney at Sepahi Law Group, APC can represent you
throughout the process of arbitration and help you to make a compelling argument
to protect your rights.

An arbitrator reviews testimony and evidence presented by the disputed parties at a

hearing and resolves the dispute by issuing a decision that may include an award of
money. You can think of an arbitrator as a private judge hired by the disputing parties
to resolve their dispute. If the arbitration is binding, the parties cannot seek a reversal
of the decision in court except under very limited circumstances. However, the
successful party can seek help from a court in enforcing the arbitrator's decision. An
arbitrator serves as the decision-maker and 'referee' in an arbitration proceeding,
much like a judge during court litigation. The arbitrator is bound by the rules outlined
in the parties' arbitration agreement. If he is a member of a special arbitration

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organization, such as the American Arbitration Association, he will be bound by the
rules of that organization as well, including a set of ethical rules.

UNDERSTANDING THE ROLE OF AN ARBITRATOR

When a disagreement or dispute arises and the parties are not able to resolve their
differences on their own or through voluntary mediation, a third party must step in
to make a decision on whose position should prevail. When the dispute is resolved
through litigation, a judge or a jury hears the evidence and arguments and makes a
binding decision that the parties must comply with.

Litigation can be very costly for all involved parties, especially as there are strict
rules for how evidence can be presented and the process of a court hearing can take
a long time. Litigation can also result in embarrassing or private information
becoming public. Finally, when the dispute arises in a technical industry, or when
understanding the context of the dispute requires specialized or industry-specific
knowledge, a judge or jury may not be in the best position to resolve the
disagreement.

Arbitration is an alternative to litigation. The process of arbitration can be less

costly, and the disagreement and outcome of the case can remain private. An
arbitrator can also be selected that has inside knowledge and a deep understanding
of the issues about which the disagreement is centered.

Parties can elect to resolve their disagreement through arbitration at the time when
the dispute arises; however, it is more likely that disputes will be submitted to
arbitration because parties agreed this would be the process before a problem arises.
For example, many real estate contracts contain an arbitration clause and many
companies also include arbitration clauses in product terms and conditions or
employment agreements.

Regardless of whether the parties submit their dispute to arbitration because they
want to, or because they were bound to do so by an arbitration clause, the role of the
arbitrator is the same. The arbitrator will listen to evidence that each party presents,
consider any contract terms and provisions, apply any applicable laws, and make a
decision on an appropriate resolution of the disagreement. In a breach of contract

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case, for example, the arbitrator can interpret the terms of the contract, decide how
they apply to each party’s rights and obligations, decide if a breach has occurred,
and decide what remedy is appropriate.

Arbitration may be formal or informal, and the arbitrator may conduct the case just
like a trial or may use a different procedure. In all cases, the role of the arbitrator is
to make an impartial choice based on the applicable law and facts.

If your dispute is to be resolved in arbitration, you need a lawyer who has experience
with this type of alternative dispute resolution. Call a San Diego arbitration lawyer
at Sepahi Law Group, APC today to schedule a consultation and learn more about
how an attorney can help you.

ARBITRATOR IN LEGAL DISPUTE

Every business or other areas of human endeavour has some or the other kind of
disputes in various spheres, To resolve these disputes parties will often seek an
amicable resolution of whatever gripe they maybe harbouring. And as a result the
role of third parties in assisting to resolve contentious issues becomes a pertinent one
which requires careful and balanced handling, and in many cases arbitration is used
as a settlement technique that involves third party input - it takes a resolute decision
that is legally binding for the quarrelsome parties. Mediation is another form of
alternative dispute resolution (ADR) in which a settlement negotiation is
strengthened by a third party leading to a non-binding resolution unlike with
arbitration that can be likened to litigation in courts. Arbtration is utilized by the
cases involving Commercial disputes and this is usually the case with international
commercial transactions. Consumer and employees cases often witness mandatory
arbitration by virtue of the fine print contracts, and as a consequence this translates
to the denial of the right to access the courts as individuals.

As arbitration becomes an increasingly attractive alternative way of resolving

disputes compared to lengthy and often expensive court proceedings, arbitrators are
ever more in demand and their roles increasingly important. Arbitration is often
favoured over formal litigation not only from a cost and time efficiency perspective,

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but also because it often offers more practical solutions, and as a process is structured
specifically to facilitate resolution.

As well as the multiple and sometimes complex practical responsibilities arbitrators

assume, there are also a number of non-binding ethical codes for arbitrators, some
of which are set out in the Arbitration Act, while others have been developed by
judges and can be found in the common law. Section 33 of The Arbitration Act 1996
states that “the tribunal shall—(a) act fairly and impartially as between the parties,
giving each party a reasonable opportunity of putting his case and dealing with that
of his opponent, and (b) adopt procedures suitable to the circumstances of the
particular case, avoiding unnecessary delay or expense, so as to provide a fair means
for the resolution of the matters falling to be determined.”

For clients new to alternative dispute resolution methods, it may feel like a leap of
faith placing one’s trust in somebody outside of the court. However, arbitrators, like
lawyers, are well regulated by external bodies such as the International Chamber of
Commerce (ICC), to uphold the same core values that are enshrined in the court
system. Expert Evidence’s experts are no different, and are approved by external
bodies such as the Expert Witness Institute, Sweet and Maxwell, and the UK register
of Expert Witnesses.

Thus the arbitrator’s role is a crucial one, and one that demands a unique
combination of experience, knowledge and skill. It is increasingly common to find
arbitration clauses in consumer and business contracts, and its prevalence only
attests to its usefulness as a dispute resolution method.

Not unlike a judge in a court proceeding, an arbitrator is an independent and

impartial third party who carefully considers and analyses the evidence put before
him or her, drawing on his or her knowledge of relevant laws and policies in order
to weigh up each party’s case and make a resulting ruling. However, unlike a judge,
an arbitrator is actually chosen by the disputing parties in lieu of formal court
proceedings, and may be selected specifically for his or her industry knowledge
particularly in complex cases where specialised expertise might be required. An
arbitrator will often encourage collaborative communication between disputing
parties in an attempt to reach settlement before official arbitration proceedings begin,
and throughout proceedings will act as a referee, facilitating discussion. If a
settlement is reached, the arbitrator will then draft a settlement agreement.

If settlement cannot be reached and the parties move to formal (binding) arbitration
proceedings, an arbitrator acts like a judge in reviewing and interpreting all the
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evidence presented to him or her (this may include witness statements, testimony,
documentation and so on), applying the relevant laws and rules to the arbitration,
and then making a final decision or ‘award’ which – like a judge’s – is final and
binding, and can only be appealed against in certain unique circumstances. Non-
binding arbitrations can later be taken to court if clients are dissatisfied with the
process or its outcome, whereas binding arbitrations are generally upheld to be
such, by practitioners and by courts.

An Arbitrator's Duties in legal dispute

An arbitrator has several duties. Among them are:
 Interpreting and applying the rules and laws applicable to the arbitration

The applicable rules should be outlined in the arbitration agreement. The parties may
also designate a particular state's law to govern the dispute in the arbitration
agreement.

 Managing the scope of discovery that can be undertaken by both parties

Discovery is a formal process of investigation to determine facts relevant to the

dispute. The investigation can include taking witness statements and reviewing
documents required to be disclosed by the other disputing party.

 Conducting the arbitration hearing in which both sides of the dispute may
submit testimony, other evidence such as documents, and arguments

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Each side's position may be summarized in a written document, often called
a statement of the case, and be submitted to the arbitrator to review as part of the
hearing process.

 Making a decision resolving the dispute based on the testimony, evidence and
arguments submitted by both sides of the dispute

A decision may include granting an award of money.

An Example of Arbitrator in legal dispute

Let's say you hired a general contractor to renovate your kitchen. You signed a
contract, which included the expected cost of the renovation and the time for
completion. The project is completed three weeks late, was over-budget by about
11% and you believe the work was shoddy. Upon review of the contract, you see
you agreed to mandatory binding arbitration, using an arbitrator from the Better
Business Bureau.
At the hearing, you meet with an arbitrator at his office. You present the arbitrator a
statement of your case, which includes the facts you believe are relevant and your
argument. The arbitrator conducts a hearing where he permits you to make an
opening statement about your side of the dispute. The general contractor then
presents his opening statement. You and the general contractor present evidence,
such as the contract, pictures of the finished kitchen and testimony from
subcontractors. You make a final argument, and the hearing concludes. Sometime
later, the arbitrator issues a written statement that describes the relevant facts, the
law applied and the decision.

Conclusion:
India has in place a modern, an efficient Arbitration Act. There have been some
decisions which are not in tune with the letter or spirit of the Act. Hopefully, these
would be addressed by the judiciary in the near future and continuing popularity of
arbitrations would be served by a truly efficient ADR mechanism.

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