International arbitration is a leading method for resolving dispute arising from international commercial agreements and other international relationships. As with arbitration generally, international arbitration is a creation of contract, i.e., the parties’ decision to submit disputes to binding resolution by one or more arbitrators selected by or on the behalf of the parties and applying adjudicatory procedures, usually by including a provision for the arbitration of future disputes in their contract. The practice of international arbitration has developed as to allow parties from different legal and cultural backgrounds to resolve their disputes, generally without the formalities of their respective legal system.
International dispute settlement is concerned with the techniques and institutes which are used international disputes between States or international organizations. International disputes can be solved either by use of force or by peaceful settlement. Techniques used for peaceful settlement of international disputes are negotiation, inquiry, mediation, conciliation, arbitration, judicial settlement, resort to regional agencies or arrangements, or other peaceful means of their own choice.
A commercial dispute includes disputes arising from, for example, a payment default on delivery of goods or a dispute concerning the payment and finalization of projects.
Usually a dispute settlement clause in a commercial contract indicates the forum at which an existing or a future dispute should be settled. This can be a local court via litigation as per the agreed applicable law or an arbitration court as per the agreed arbitration rules. In the absence of such dispute settlement clause, rules of international private law decide in which jurisdiction and at which forum a claim can be brought.
This will provide a detailed insight into the functioning of the dispute resolution system of India as well as resolution system of Australia.
A well organized ADR system will provide a basis for a strong foundation for international business transaction and develop a sense of ethics and righteousness, apart from that it would provide me a great deal of exposure to the various systems prevailing and help me to deduce an effective solution in the context of the India.
HISTORY and INTRODUCTION
International commercial arbitration is one of several forms of dispute resolution for international commercial agreements. The use of arbitration has increased along with the growth of international trade and commerce and the accompanying disputes springing from these pursuits. In its broadest sense, arbitration is a vehicle of dispute resolution in which parties to a contract select a neutral arbitrator (or a panel of arbitrators) to present their dispute for a legally binding ruling. Arbitration is often selected for the reasons of confidentiality, and to eliminate the uncertainties in the choice of arbitrator and forum. Parties from different national origins may also be reluctant to accept national court litigation with the potential for national bias. Arbitration offers the parties more control over how proceedings will be conducted. Dealing with the issues arising from, and the management of, dispute resolution on an international footing is increasingly important. In adopting an international outlook and engaging more frequently in international transactions, companies require strategies and advice for achieving effective and efficient resolution of differences, by arbitration and other means. International commercial arbitration is now a key component of the commercial calculations in international business transactions. It holds an important place in the global international business environment along with the other ways in which parties can manage disputes or have them resolved and any outcomes enforced if required.
DISPUTE RESOLUTION SYSTEM IN INDIA
India is the most populated democracy in the world. The federal constitutional republic consists of a multi-ethnic society where more than 400 languages are spoken. Despite various autonomous arbitral bodies and provisions for arbitration and conciliation for particular categories of cases (such as labor and family), litigation in India continues to rise. Since independence, several governmental committees have advocated for reduction in court debts, including judicial education to enhance the capacity of judges in order to improve the quality of their output. The Legal Services Authority Act of 1987 established the LOK ADALATS, throughout the country, which helped settle or otherwise dispose of a significant number of cases. The Supreme Court approved the Civil Procedure Alternative Dispute Resolution and Mediation Rules in 2003.A judicial mediation system commenced in September of 2005 in the Tis Hazari District Court, with six trained judicial officers assigned one day per week, to deal with mediated cases. The initial success led to establishment of the Delhi Mediation Center, which currently has four working centers at District Courts in Tis Hazari , Karkardooma , Rohini and Dwarka and Saket. Each center is manned by a senior judicial officer of the rank of Additional District Judge, who administers the center and examines and assigns the cases for mediation to the mediators.
DISPUTE RESOLUTION SYSTEM IN AUSTRALIA
Australian Centre for International Commercial Arbitration (ACICA) established in 1985, its objective is to promote and facilitate the efficient resolution of commercial disputes in Australia and internationally by arbitration, with the aim of delivering expediency and neutrality of process,
enforceability of outcome and commercial privacy to parties. ACICA is a signatory to co-operation agreements with over 30 global arbitral bodies.
COMPARATIVE ANALYSIS OF INDIA AND AUSTRALIA
Position of ADR in India:-
Alternative dispute resolution in India is not new and it was in existences even under the previous Arbitration Act, 1940. The Arbitration and Conciliation Act, 1996 has been enacted to accommodate the harmonization mandates of UNCITRAL Model. The Acts which deal with Alternative Dispute Resolution are Arbitration and Conciliation Act, 1996 and the Legal Services Authorities Act, 1987. Section 89 of the Civil Procedure Code, 1908 makes it possible for Arbitration proceedings to take place in accordance with the Acts stated above.
Types of ADR process in India:
- Tribunals in India.
- Civil Procedure Code.
- Conciliation and Mediation.
- Arbitration and Conciliation Act, 1996.
- Lok Adalat.
- Judicial Arbitration.
Position of ADR in Australia:-
Historically, in Australia Alternative Dispute Resolution has largely been perceived as a non-judicial function. Mediation is the main form of ADR used in Australian Courts (Victorian). The Victorian courts refer cases to conferences, which are normally pre hearing conferences, conciliation and sometimes arbitration. Mediation can be followed voluntarily, by the order of the Hon’ble Court and or existing contractual agreement. The Supreme, the Magistrates and the Country Courts have the right to order any part of the proceeding or all of the proceeding to mediation, with or without the consent of the parties.
Types of ADR process in Australia:
- Facilitative – where a dispute resolution practitioner assist the parties to a dispute to identify the dispute issues, develop opinion, consider alternatives and try to reach an agreement about some issues or the whole dispute.
- Advisory – Example of advisory include: case appraisal, conciliation, and neutral evaluation.
- Determinate processes – include mediation, conciliation, facilitation and facilitated negotiation.
Negotiation – for example lawyers and agents.
- Permanent Court of Arbitration (PCA).
- United Nations Commission on International Trade Law (UNICITRAL).
The justice dispensation in India has come under great stress for several reasons, mainly due to huge pendency of cases in the courts.
Alternative Dispute Resolution is a mode of resolution of disputes through arbitration, conciliation, mediation which provides an alternative route for resolution of disputes instead of resolution of disputes through courts. The principles of ADR are successfully adopted in the Indian Legal System as an alternative to the justice delivery system. With the advent of the alternative dispute resolution, there is new avenue for the people to settle their disputes.
Acts, Statutes and Books:
- Arbitration and Conciliation ACT, 1996.
- AAA Commercial Arbitration Rules of 2009.
- The Legal Service Authority Act, 1987.
- Australian Dispute Centre, ACICA.
- International Arbitration ACT, 1974.
- ACICA Appointment of Arbitrators Rules 2011.
- International Commercial Arbitration in India – A legal perspective, Author, G.C. Kabi.
- Alternative Dispute Resolution – 4th edition Australia.
Sunny Kumar, Pursuing Ph.d,
Mewar University, Chittorgarh