A new ERA for Arbitration, Developing Institutional Arbitration

Institutional arbitration, is the process by which the process of arbitration is conducted by a specialized institution. A specialized institution takes up role of administering the arbitration process. Each institution has its own set of rules which provide a framework for the arbitration, and its own form of administration to assist in the process. Essentially, the institution determines the contours and the procedures of the arbitral proceedings designated by the parties. Further, the secretariat and professional staff of the institution are assigned to assist the arbitration process. Institutional arbitration has a rigid and organized procedure and thus it provides several advantages to the parties who opt for this arbitration procedure.

There are a large number of institutional arbitration across the world in London, Dubai spread of institutional arbitration however, it is new concept in India that is being adopted eventually. In this context, the Act is institutional arbitration agnostic – meaning thereby, it neither promotes nor discourages parties to consider institutional arbitration.
Why should parties opt for institutional arbitration

Institutional arbitration saves parties and lawyers from determining the arbitration procedure and of drafting an arbitration clause. The parties may select an institution; the institution’s draft clause may be inserted into the contract. The institution can amend the clauses in the contract from time to time ensures there is no ambiguity in relation to the arbitration process.

An institution’s panel consisting of experts from various regions of the world and include many different vocations. The parties shall be free to select an arbitrator of their choice to initiate the arbitration process. However, the parties merely nominate an arbitrator but further powers to appoint the same arbitrator should lie with the institution.

A further benefit of institutional arbitration is that the parties and arbitrators can seek assistance and advice from institutional staff.

One other advantages of arbitration generally is that it provides a final and binding award which calls for an inherent risk that a mistake made by a tribunal could not be rectified at a later stage. For the same reason, some institutional rules provide for scrutiny of the draft award before the final award is issued. A dissatisfied party could then appeal to an arbitral tribunal of second instance which would be able to confirm, vary, amend or set aside the draft award.

The following steps shall be adopted in India for the growth of institutional arbitration across the nation:

  • It is essentially required to popularize the idea of institutional arbitration in India and thus it is necessary for the citizens to know the advantages of opting for the arbitration process and establishing an institution towards that effect which will conform to international standards.
  • The Supreme Court and the other High Courts should take up the responsibility to promote institutional arbitration in India. This shall begin with the formation of a Committee of experts in the field of Arbitration which may include retired judges of Supreme Court and High Courts, while the presiding judiciary of the country should also perform the advisory and supervisory functions.
  • The Supreme Court and High Court should promote institutional arbitration in India both actively as well as passively.
  • There are not enough governing laws to favor institutional arbitration in India. So requirement of new legislation becomes necessary at once and moreover the prevalent laws is required to be amended for the purpose of easing out the growth of institutional arbitration in India.
  • Legislative Sanction to institutions such as ICC and SIAC which provide for Emergency Arbitrator by broadening the definition of Arbitral Tribunal and thus the Legislature, here has to play an important role for the same.
  • Government of India shall also provide for financial aids and infrastructures for such institutions.

Thus, it is seen that the Legislature and the Judiciary should work together for the purpose developing the concept of Institutional Arbitration and the role required to be played by Government of India also shall not be ignored.

By –

Annesha Das
4th Year BBA LLB
Symbiosis Law School, Pune