Thursday, October 4, 2007


Arbitration as an adjudication process can be traced to the olden age when civilization was at its primitive stage. People were living in groups then. There used to be a leader for that group and he decided the disputes that arose among the constituents of that group and his verdict was accepted to be final. When civilization grew and people started living as a community, there was community panchayat which system extended as village panchayat at a later period. The said Panchayat was headed by a man of integrity and repute and he will be assisted by members who were drawn from various communities. The complaint that was referred to the Panchayat was decided based on its evidentiary value and the decision of the village panchayat was final and binding on the parties to the dispute. There was no appellate procedure in such adjudication. This ancient medieval form of Indian jurisprudence is still vogue in many rural parts of India. Since the decisions and the procedure adopted for resolving the disputes depended on the usage and customs that was practiced in a particular area, there was a medley of conflicting laws and systems of administration of justice. After the advent of British rule in India, the beginning of the era of codification of laws started by enactment of Charters Act, 1833. The new codes brought about a perceptible change and uniformity of administration of justice in India. The “adversarial” system of justice was introduced wherebv two opposite parties pitched against each other were given level playing field and were given equal opportunity to present their case before a judge. After our independence we have carried forward that system with certain modifications to suit the requirements of our citizens. Art.33A of Constitution of India assures that the operation of legal system promotes justice on the basis of equal opportunity to every citizen and no one will be denied access to justice on account of his financial or other disability.
Pausing here for a moment, if we ask ourselves whether we have achieved the goal as set out under Art.33A of Constitution of India going by our experience in the past 50 years, the answer would be sadly no. The reasons are many. Though our legal system by and large strives to give equal opportunity to all the citizens, it is doubtful whether a common man has easy access to justice. Most people in our country regard courts as temple of justice. But the entry has become difficult for them in view of the high cost of litigation involving court fees, advocates fees etc., Adding to their woes is the delay encountered by our courts in the administration of justice. Conventional courts are more often grappled with problems concerning procedural wrangles which resulted in thousands of cases not seeing the light of the day for several decades. Apart from the same, the recent growth of Indian economy necessitated enactment of numerous laws which are complex in nature creating new rights and obligations and calling for various interpretations compounding the crisis of litigants. The legal awareness among the litigant public of their rights is also a major contributing factor for the docket explosion that we are witnessing today. This phenomenon is not unique to India alone. Many developed countries also faced similar problems.
In this backdrop the Arbitration & Conciliation Act, 1996 enacted under the UNCITRAL model law code offers definite advantages that litigation from its very nature can never provide. Arbitration is a legal process not statutorily created but by the parties themselves through agreement. It offers procedural flexibility. The parties are free to choose their arbitrator/s. Unlike structured court procedures, it can be as casual as a discussion in a conference table and the parties have the freedom to choose the applicable law, neutral party as their arbitrator/conciliator, fix the convenient day and place for hearing the case and also fix the fees for the arbitrator which are always lower than the costs involved in a normal litigation through statutorily created courts. Courts have always adopted a conservative approach to problems. The Courts of law are put into a straight jacket as it has to follow fixed procedure and fixed rules of evidence. Arbitration, on the other hand, is more informal. The Evidence Act is not applicable to arbitration. The Civil Procedure Code has no application. The arbitrator need only proceed in a manner conforming to justice, equity and good conscience. He is not henched in by any formulated rules. One of the major advantages of arbitration is that an expert arbitral tribunal can be selected considering the field of dispute, so much so, the entire procedure can be conducted without the intervention of expert lawyers, with major gains in speed and economy. Thus many disputes as to quality in commodity trades, many disputes arising out of construction contract etc. can be settled through arbitration in a speedy manner at lesser cost and more quickly than through courts. Recently Supreme Court has held that there are hardly any subject matters which cannot be decided through arbitration. Common man’s problems like his contractual rights in the matter of property transactions, family disputes like partition etc., can be easily resolved through arbitration. Ideally, family disputes being mostly ego-centric and has a history of long drawn legal process can be easily resolved through arbitration. However there are certain exceptions to this. Subject matters relating to crimes, matrimonial issues, public policy and religious matters cannot be subjected to arbitration.
The following are the some of the potential advantages over judicial proceedings:
1. when the subject matter of the dispute is highly technical, arbitrators with an appropriate degree of expertise can be appointed
2. arbitration is often faster than litigation in court
3. arbitration can be cheaper
4. arbitral proceedings and an arbitral award are generally private and confidential unlike court proceedings.
5. the arbitral process enjoys a greater degree of flexibility than the courts
6. there are limited avenues for appeal of an arbitral award, which can mean swifter enforcement and less scope for a party to delay matters.
7. to adopt procedures suitable to the circumstances of the particular case, so as to provide a fair means for resolution of the dispute.

More than a century ago, Abraham Lincoln had said "discourage litigation. Persuade your neighbours to compromise, whenever you can. Point out to them the nominal winner is often real loser in fees, expenses and waste of time." What was said then is still equally true. Indian legal system has taken a full circle in as much as we have adopted the old system of justice with some modification under the internationally accepted legal banner of arbitration. The said justice rendering system having evolved from common man will necessarily support common man. So let us all endevour to popularize this mode of alternate dispute resolution system so that the benefits of this system my reach the common man and the commercial man as well.