This article is written by Harmanpreet Kaur from Amity University, Kolkata. The article focuses on the essentials that the arbitrator must profess in the arbitral proceedings.
Table of Contents
Introduction
Humans are gregarious and their life in society necessitates continuous interaction with others, which as a result led to conflicts and disputes in personal trade and business relations. Disputes in trade and business transactions require quick resolution to maintain peace, harmony, development, and progress in society. Rapid progress in the fields of trade and business within and outside the country led to the detonation in the dispute, thereby requiring a swift resolution.
The courts are already burdened with heavy caseloads and are unable to cope with them, thereby resulting in the backlog. The resultative backlog immeasurably impedes the litigation process. Without a matching rate of conflict resolution, there was a veritable blockade of development with its deleterious effect on the country’s economy, which gave an impetus to the legislators of the parliament to devise an Arbitration Dispute Resolution to solve the cases with a speedy approach without a delay in the procedure of providing justice.
In the case of court proceedings, the litigators and the judicial authority or the judge play an important role in deciding the case and coming to the conclusion, but in the arbitral proceedings, the process of arbitration can only signify accomplishment, with the help of an eminent arbitrator, who should act as a fair impeding authority in deciding the case and granting justice to the parties, complying with the principles of natural justice. Arbitrators appreciate firmness and thereby play a very important role in delineating the issues, addressing the arguments, and also include the methodology on which the basic valuation is done.
Arbitration – an overview
Meaning of arbitration
The dictionary meaning of the term ‘arbitration’ states that, ‘the process by which the parties to a dispute submit their differences to the judgment of an impartial person or group appointed by mutual consent or statutory provision’.
In other words, the term arbitration can be defined as the mechanism that is required for solving disputes and the differences between the parties in a dispute. It is a speedy and timeless process. It is one of the four major forms of alternative dispute resolution i.e, negotiation, mediation, conciliation, and arbitration. It is the process in which the dispute can only be solved by one or more arbitrators, and is not independent of the decision of the court, but the contractual disputes between the parties can be made enforceable and executable as a decree of the court. It is the oldest method of settling the disputes between the parties by referring the dispute to an independent, unbiased, and impartial third person called the arbitrator, who instead of litigating the matter in a usual manner and taking it to the courts, tends to solve the matter avoiding technicalities and long procedural sessions thereby ensuring substantial justice within the limits of the law.
Importance of arbitration
The method of arbitration is evolving and new experiments and evaluations are being carried out constantly by the arbitral organizations and this process of law is gaining momentum all over the world. The practitioners and the people entailed in the legal field i.e, the judiciary is already overburdened with cases, leading to disputes and differences in the business dealings, which as a result leads to the delay in the justice system. The need for the mechanism of alternative dispute resolution is being accepted and has attained demand in the 21st century. It is a substitution to the procedure of the courts, which acts as a speedier remedy to the disputing parties. The law colleges and the universities are adapting methods and taking initiatives by forming alternative dispute resolution societies and communities, organizing debates, seminars, and webinars to give exposure to the field of arbitration and the arbitral proceedings and spread it among the young lawyers and practitioners.
Legislative framework
The legislation governing the mechanism of arbitration in India are:
The Arbitration and Conciliation Act, 1996
The Arbitration and Conciliation Act, 1996 was substantially a result of three enactments namely, the Arbitration Act, 1940, the Arbitration (Protocol and Avocation) Act, 1937, and the Foreign Awards (Recognition and Enforcement) Act, 1961. The Act was introduced to comprehensively cover the disputes related to domestic and international regimes. It aimed at providing free, impartial, and fair justice to the disputing parties. The process also helps in reducing the workload of the judicial system and the courts; thereby giving it worldwide recognition.
The Indian Contract Act, 1872
The Indian Contract Act, 1872 does not directly deal with the procedure of arbitration nor consist of any provisions related to the process, but does give recognition to the contracts involved in arbitration, and enables the enforceability of the courts for the arbitration contracts.
Arbitrator – A crucial identity in the mechanism of arbitration
Meaning of arbitrator
As per the dictionary meaning, ‘An arbitrator is the person who has been officially chosen to decide between two people or groups who do not agree’. In other words, an arbitrator can be defined as a person who acts as a neutral dispute resolution authority, in deciding the issues between the parties in a dispute. The arbitrator acts as a supreme authority in the process of arbitration and holds the same position as that of a judge. Hence, he is bound to follow the principles of natural justice, and act in a just way in providing justice to the parties.
Qualifications of an arbitrator
The Indian legislation does not specify the qualifications required to become an arbitrator. Under the Arbitration and Conciliation Act, the person can only be appointed as an arbitrator if he is not a minor and is of sound mind. The arbitrators in India are appointed by the arbitral institutions and associations, which includes a panel of experts who appoint arbitrators on their understanding.
Essential qualities that an arbitrator should possess
Arbitration is a process to settle disputes in the commercial arena. But the process cannot flourish if there are no arbitrators to resolve the issues between the parties. A person to be appointed as the arbitrator should retain some specialized skills and qualities to get that superior position and authority in the arbitral proceedings.
Let’s take a look into some of the qualities that a person must possess –
Competency
Even though there has been no mention of the essential qualities and qualifications in the Arbitration and Conciliation Act,1996, the basic requirements that the person must possess to be appointed as an arbitrator are that he must have completed the age of majority i.e., he must be more than 18 years of age and should be of sound mind i.e, not a lunatic and has not been framed under any charges either of a criminal and a civil nature under the various provisions of law.
Experience
An arbitrator must have knowledge and experience over the matters in which he is asked to preside. A mediocre arbitrator can conduct normal arbitral proceedings but lacks adequacy when it comes to framing the issues or solving the disputes between the parties. The person must have excelling skills in examining the facts and pronouncing the judgment, following the due process of law which can only be attained and achieved with maturity and proficiency in life. Not only the judicial proceedings but the arbitral proceedings are also judged and determined on the facts and circumstances of the case. The facts of the cases can only be ascertained if the person to be appointed as an arbitrator has been well versed with the functioning of the systems, people, and the principles of law.
Professionalism
Not only the legal professionals, practitioners, and young lawyers but the arbitrators should also possess professional behaviour. He must keep in his mind that he is assisting and providing legal aid to the parties in the dispute and then come to a final and binding conclusion. They should be respectful, diplomatic, and professional in their work. He is not a judge, so does not have any inherent powers and his powers and efficacy are derived from respect, consistency, and diplomacy.
Task management
The person to be appointed as an arbitrator must avail attributes in managing the tasks and must possess leadership qualities. As the procedure of arbitration is lengthy and extensive, he should not lose his calm during the arbitral proceedings. The deprivation in his managing work can challenge his power as an arbitrator and he can even lose his position because of his unprofessionalism at the workplace and task management.
Legal educational expertise
It would be beneficial in the process of arbitration if a person to be elected as an arbitrator is from a legal background. The person must be well versed with the judicial laws of the land and must have credentials for the same. In the arbitral proceedings, they must justify and state the rationales for their respective decisions, as the decisions of the arbitrators can be challenged and reviewed by the judges. The selection of an arbitrator with formal legal education and legal experience with justiciable credentials will increase his likelihood of handling the complex questions in the dispute responsibly and ensuring justice to the parties
Drafting and writing skills
The legal practitioners and young lawyers are always advised to have adequate writing and drafting skills as they are the ones responsible for drafting the agreements, contracts, and legal petitions. In the same way, the arbitrator must have efficient and exemplary writing skills as it is his evident duty to make an award enforceable in the dispute. The documents sent to the disputing parties in the written form either an agreement, files, or even emails, and granting an award in the arbitral proceedings should be clear, consistent, and unambiguous.
Attending certified courses
The arbitrators can enhance their skills in arbitration by attending certified training and diploma courses that are initiated by the various dispute resolution organizations and forums such as the Chartered Institute of Arbitrators (Carib). The organizations offer distance learning diplomas in the reign of arbitration. The diplomas are organized to benefit those who want to represent themselves as arbitrators and could help the parties in the arbitration situation. Once the person has been certified for attending the diploma courses and training, he should take initiatives in building his career professionally and attend arbitral proceedings to get exposure to the processes of arbitration practically. The person can also opt for internships and can even assist the manager of the firm or can join as a legal staff.
Impartial and fair
The person appointed as an arbitrator or to be appointed as an arbitrator by the council should be independent. He should not have any kind of social, familial, and/or business relationships with the parties in the disputes as this could lead to biases. He should be neutral and must be impartial and fair. The person while pronouncing the judgment in the form of an award should act on the principles of natural justice, equity, and rule of law.
Management skills
The person to be appointed as an arbitrator must have efficient communication skills. He should have an able and proper understanding of managing people involved in the proceedings. The management skills should also include the ability to stride the line between laxity and undue delay on the one hand and the dictatorial and unreasonable demands on the other hand. If the management skills are not exercised properly then the speedy justice and cost-effectiveness correlated with the arbitral proceedings cannot be comprehended.
Demonstration of communicative proficiency and judicial open-mindedness
Communication skills act as a primary tool in listening to the parties in dispute, synthesizing their respective positions, and obtaining satisfactory skills. They also have the right to put further arguments in their defence, pose questions, make decisions and articulate the problems persuasively adequately.
Managing the caseload
The person, if appointed as an arbitrator, should schedule matters to be solved in advance. This would help in providing speedy resolution of the cases and equitable justice to the parties. If the matters are scheduled in advance, it would reduce the caseload on the arbitrators, and prevent a further backlog of the cases.
Conclusion
An arbitrator holds a very eminent position in the arbitral proceedings, and the procedure is not similar to those of the court proceedings and the petitions and files are drafted in a very different way. The process of arbitration is gaining momentum in this present world. Even though there have been legislations for arbitration, there are no adequate qualifications on how an arbitrator should be appointed.
The person should always be appointed as an arbitrator after the recognition of his skills and credentials. At the same time, it is also important that amendments should be made regarding the appointment of the arbitrator in the Arbitration and Conciliation Act,1996 and a new provision should be introduced stating the qualifications and all the sufficient details of an arbitrator, as he is the person who is at an eminent and a superior position to decide the case of arbitration.
References
- https://www.rics.org/mena/news-insight/latest-news/news-opinion/essential-qualities-needed-to-become-a-successful-arbitrator/
- https://www.international-arbitration-attorney.com/wp-content/uploads/arbitrationlaw0405202743129.pdf
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