PP501: Professional Practice
Lecture 5
Module 5
1. Arbitration – Principles, Indian Arbitration act, Powers and duties of arbitrators,
Revoking authority, Umpire and Award.
2. Valuation – Purpose, Value, Factors affecting value, Value classification,
Classification of Ownership, Valuation reports, methods of valuation.
3. Easement – Definition, various types, essential conditions for enjoyment of
easements, Valuation for Easements.
Ongoing Lecture Assignment Completed Upcoming/Self study
Arbitration
Arbitration is a process in which a dispute is submitted to an impartial outsider
who makes a decision which is usually binding on both the parties.
The arbitrator enforces his own point of view on the contending parties and the
opinions of the participants are not given any predominance.
Arbitration is a judicial process.
The award of the arbitrator is binding and rests on equity and justice, i.e., there is
no scope for compromise.
Arbitration
Powers and Duties of Arbitrator
1. To administer oath to the parties and witness appearing
2. To act judicially and impartially
3. To put necessary interrogatories to any party to the dispute
4. To determine by and to whom the costs of reference and the award shall be
paid
5. To award interest
6. To fix amount, mode and time of payment
Arbitral Disputes
1. Property
2. Insurance
3. Contract (including employment contracts)
4. Business / partnership disputes
5. Family disputes (except divorce matters)
6. Construction
7. Commercial recoveries
Non Arbitral Disputes
1. Matters of criminal nature.
2. Disputes relating to matrimonial relations.
3. Testamentary matters relating to the validity of a will.
4. Relating to trusts for public purposes of charitable or religious nature.
5. Insolvency matters.
6. Matters relating to the guardianship of a minor or lunatic.
7. Any execution proceedings.
Indian Arbitration Act
Types of Arbitration
1. VOLUNTARY ARBITRATION
• Voluntary arbitration implies that the two contending parties, unable to compose
their differences by themselves agree to submit the conflict/dispute to an
impartial authority, whose decision they are ready to accept.
• Essentials of voluntary arbitration:
i. The voluntary submission of dispute to an arbitrator.
ii. The subsequent attendance of witnesses and investigations.
iii. The enforcement of an award may not be necessary and binding.
iv. Voluntary arbitration may be specially needed for disputes arising under
agreements /contracts.
Types of Arbitration
2. COMPULSORY ARBITRATION
• Compulsory arbitration, is one where the parties are required to accept
arbitration without any willingness on their part.
• When one of the parties to an industrial dispute feels aggrieved by an act of the
other, it may apply to the appropriate government to refer the dispute to an
adjudication machinery.
• Essentials of Compulsory Arbitration:
i. the country is passing through grave economic crisis
ii. industries of strategic importance are involved
iii. parties are ill balanced
iv. Compulsory arbitration leaves no scope for strikes and lockouts; it deprives
both the parties of their very important and fundamental rights.
Types of Arbitration
3. AD-HOC ARBITRATION
When a dispute or difference arises between the parties in course of commercial
transactions. This arbitration is agreed to get justice for the balance of the un-
settled part of the dispute only.
4. INSTITUTIONAL ARBITRATION
There is prior agreement between the parties that in case of future differences or
disputes arising between the parties during their commercial transactions, such
differences or disputes will be settled by arbitration as per clause provide in the
agreement.
Types of Arbitration
5. STATUTORY ARBITRATION
It is mandatory arbitration which is imposed on the parties by operation of law. In
such a case the parties have no option as such but to abide by the law of land. •
6. DOMESTIC OR INTERNATIONAL ARBITRATION
Arbitration which occurs in India and have all the parties within India is termed as
Domestic Arbitration. An Arbitration in which any party belongs to other than India
and the dispute is to be settled in India is termed as International Arbitration.
7. FOREIGN ARBITRATION
When arbitration proceedings are conducted in a place outside India and the
Award is required to be enforced in India, it is termed as Foreign Arbitration
Umpire
An umpire, who is a third-party appointed by the arbitrators to settle differences
between the arbitrators, is to be distinguished from the presiding arbitrator, who is
one of the arbitrators. The scope of functions of an umpire and those of the
presiding arbitrator in a three member arbitral tribunal may be different.
What is the difference between an arbitrator and an umpire?
Umpires are used either to break an impasse in arbitration or to serve as
specialized, long-term decision makers. An arbitrator is a person selected by the
parties to hear the dispute. ... In this situation a single, permanent umpire is
appointed to resolve disputes for the term of the collective bargaining agreement.
Award
Award
Award
Award
Advantages of Arbitration
1. Choice of decision maker with expertise
2. Speed
3. Lower-cost
4. Flexible
5. Confidentiality
6. Less formal than court
7. Preservation of business relationships
Disadvantages of Arbitration
1. Limited recourse
2. Uneven playing field
3. Lack of transparency
4. Cost: parties pay for arbitrator and agency
5. Limited rights of appeal, fewer means to challenge award
6. Lack of formal recovery
Arbitration in India
• Indian council of arbitration, 1965
• Abide Arbitration and Conciliation Act, 1996
• Comprehensive legal framework
• 95% arbitration is of type ad-hoc
• India No. 2 in arbitration cases reaching Singapore centre
• Mumbai to have India's first International Arbitration Centre soon
Reference
• Professional Practice, 2016, Dr. Roshan H Namavati