ARBITRATION I:Ways to Resolve Conflict, Advantages of Arbitration, Disadvantages of Arbitration

<< LAW AND ETHICS OF MEDIATION II:Role of ethics in mediation, 8 Dimensions of Ethics in Mediation

ARBITRATION II:Varieties of Arbitration, Process of Arbitration, Contents of Arbitration Act >>

Conflict Management HRM624

Lesson 37

ARBITRATION I

Quotation

Law and settled authority is seldom resisted when it is well employed.

Dr. Johnson, The Rambler, 1750-52

We will learn about arbitration and its varieties in this lecture.

What we will learn about arbitration is that it is an ADR process that can closely resemble litigation. We will

also learn about the tension between providing informality and legalistic protections in arbitration. The

advantages and disadvantages of arbitration compared with litigation and other ADR processes and how

thus information can be useful to conflict diagnosticians will also be discussed.

Ways to Resolve Conflict

A conflict can be resolved in a number of ways. The methods which are usually employed are given below

Negotiation

Mediation and Conciliation

Adjudication

Arbitration

Litigation

Avoidance

Violence

We will focus here only on arbitration as negotiation, mediation and adjudication have previously been

discussed.

Arbitration

Arbitration is a legal process whereby a neutral third party (arbitrator) hears the dispute and issues an award.

Arbitration awards are final and binding on the parties and can only be challenged in very exceptional

circumstances. An arbitration award has a status similar to a judgment and arbitration.

Arbitration award

The binding decision issued by an arbitrator is called arbitration award.

Advantages of Arbitration

Following are the advantages of arbitration

1. Flexibility of Proceedings

2. Confidentiality of Proceedings

3. The Speed of Resolution

4. Low Cost relative to Litigation

5. Legally Binding Nature

6. International Enforceability

7. Expertise of Arbitrator

Disadvantages of Arbitration

A major weakness of the arbitral process is the limited powers which the arbitral tribunal may exercise.

Another perceived drawback of the arbitral process lies in the fact that, in general, it is not possible to bring

multi-party disputes together before the same arbitral tribunal. Unlike a Court of Law, an arbitral tribunal

generally has no power to order consolidation of actions.

If the Arbitrator is an expert within a specified field, he/she may not have the requisite expertise when the

dispute hinges on difficult points of law. The doctrine of precedent does not apply. Each case is decided on

its merits; and is therefore no guide to future similar cases.

124

Conflict Management HRM624

Arbitration Act in Pakistan

The law of arbitration in Pakistan is contained in the Arbitration Act, 1940 (a pre-partition enactment,

which still continues in force). Its main features are summarized as under:

The Act provides for three classes of arbitration:

(a) Arbitration without court intervention (Chapter II, sections 3-19);

(b) Arbitration where no suit is pending, (but through court) (Chapter III, section 20) and

The Act also contains further provisions, common to all the three types of arbitration

Summary

We learnt arbitration as a way of alternative dispute resolution which resembles to litigation. It is done on

case by case basis and `precedent' does not carry much value in arbitration as it does in litigation or in courts

of law.

125

Table of Contents: