Who chooses Arbitrator?
11-Aug-2021 | Article by Legal White Official
It is better to understand the process of arbitration before plunging in to the selection criteria or the process of appointment of the arbitrators. Arbitration is an alternate method which is widely being used to resolve disputes between two or more parties. It is a part of ADR which is alternative Dispute resolution which enables the disputing parties to get a resolution for their dispute without following the complex, time consuming and expensive court procedure. Arbitration comes under the purview of the Arbitration and Conciliation Act 1996 which was amended in the year 2015. Selecting or appointing the arbitrators is the foremost and the most important and intricate part of the entire process of arbitration.
As per the arbitration law, there should always be odd number of arbitrators e.g. 3, 5, 7 and so on. In generic terms arbitrators can be appointed with mutual agreement of both the parties. The selection of the arbitrators should be made after sincere effort and analysis of the kind of dispute between the parties because in order to provide a fair decision, the arbitrators should have a considerable amount of knowledge regarding it. The competency as well as the efficiency of the arbitrators should also be kept in mind. In other words, arbitrators are the one who will pass the awards and it is like giving your case their hands as the award of the arbitrational tribunal is most of the time final, binding and there is very little scope for appeal against the award.
There are two types of processes which can be followed while choosing the arbitrators.
- Ad – Hoc Arbitration – In ad – hoc arbitration, the disputing parties enjoy almost complete freedom in choosing the arbitrators as well as formulating the entire process of arbitration. The parties can adopt their rules, procedures in selecting the arbitrators, most of the time the arbitrators are preselected by both the parties and their names are also mentioned in the arbitration clause of the contract between them. Parties even go to lengths such as mentioning the process of arbitration in case of a dispute. As per the data observed, the speed of getting a resolution is very quick in this type of arbitration
- Institutional Arbitration – This is a process which is governed or administered by specialised institutions who deals in assisting the disputing parties with regards to the arbitral process. They can have their own arbitrators who are neutral to both parties. They impose their own rules and criteria for the case. They act as a service provider between the arbitrational tribunal and the disputing parties. In return to their services they charge fee from both the parties. Some of the big businesses and organization prefer this form of arbitration because they have a known set of format and rules which are used in all the cases they undertake.
To conclude, it must be ensured that, selecting the arbitrators is a very significant process of arbitration and proper homework should be done before selecting them. The arbitrators should be knowledgeable, neutral, fair and efficient.