Can I sue after Arbitration?
11-Aug-2021 | Article by Legal White Official
Arbitration is process which is a part of Alternative Dispute Resolution (ADR) which comes under the purview of Arbitration and Conciliation Act 1996 which was passed by the Indian government in the parliament. This was also amended in 2005 to make it more effective in resolving disputes. It is a process which bypasses the lengthy and complex court procedure to provide a resolution to the dispute between parties or people.
In today’s world, almost every contract has an arbitration clause, which means, in case of a dispute, the parties will have to resort to arbitration in order to resolve the dispute between them. Some of the clauses are even stricter because it may state that, the resolution can only be provided by arbitration and the parties cannot sue each other or the matter cannot be proceeded in the court.
In case the person or the party hasn’t signed any arbitration clause or agreement, then it is only the matter of choice as to use, litigation or arbitration. In case the party or a person has signed an arbitration clause, things change at a drastic level because now they have lost the right to file a litigation. The reason for this, is because the person has signed a contract in which he or she has agreed not to go for litigation and at the same time agreed to resolve the dispute through arbitration only. This type of contract is often called as the binding arbitration. This also ensures that, once the decision has been made by the arbitrational tribunal, the decision is final and binding and it can also not be appealed against. The reasons due to which many people and organizations use this type of arbitration is because it is extremely cheap and quick, however one loses the right to sue if this type of agreement is signed.
There is a middle path where in a person or a party can use arbitration to resolve their dispute and at the same time retain their right to go for litigation at any point in time. This type of arbitration agreement is called non – binding arbitration clause. This type of clause states that, in case of a dispute, the parties will use arbitration as the first method, however if the either party is not satisfied with the decision or the process of arbitration, then either party is free to file for court procedure. In this way, the parties can get the choice of both arbitration and litigation at once.
Arbitration is great way for resolving the disputes quickly and cheaply, however there are certain points which needs to be understood before reaching to the conclusion. There are multitudes of people who are happy with results they have got from arbitration, however there are also people who think that this is a process which is more in favour of large organizations and companies. No matter what one think, it is important for us to get as much information about the subject as possible before making our choices.