Scope of arbitration in legal filed / Merits and demerits of arbitration

Arbitration 

Arbitration is one of the methods to resolve outside the court. It is a widely used alternative dispute resolution method in current times. In this, the disputes are resolved outside the court or litigation practice. Both the parties concerned in the case, submit their issues or disputes to a neutral third party which is known as an arbitrator or an arbitration panel. Their judgment is a binding decision on the matter as they are acting as a private judge. The decision given by them is called an arbitration award which is enforceable by law and final.

Arbitration in India is governed by the Arbitration and Conciliation, of 1996 which was amended in 2015 to be in line with international arbitration practices.

Key features of arbitration – 

1)Commercial disputes 

It is the most popular technique for resolving business disputes, such as those involving contracts, intellectual property, and other contractual problems. Because it settles issues outside of court, protecting the company's reputation, and because it is quicker than a courtroom trial, it is chosen by MNCs and large corporations.

2)Contracts in the Public and Private Sectors:

Government Contracts: Arbitration may be used to resolve disagreements relating to government contracts, especially those for the provision of defence services.

Contracts in the Private Sector: Disputes in a variety of private sector contracts, including those involving technology, finance, and manufacturing, may be settled by arbitration.

3)Arbitration in International Trade

In order to encourage international arbitration both inside and outside of India, the new arbitration statutes have been modified. This significantly broadens the purview of arbitration. Additionally, this demonstrates India's strengthening presence in the global economy and makes it easier for businesses to arbitrate without having to worry about boundaries related to jurisdiction and geography.

Advantages 

Fairness: Because all parties agreed to the arbitrator, the judgement is fair, especially as compared to a traditional judicial trial in which neither party has any choice in who the jury or judge is. The parties may also choose an arbitrator who is knowledgeable about the subject matter of the dispute.

Timeliness: Arbitration offers a legal conclusion far faster than waiting for a trial date. Arbitration is less formal and provides more scheduling flexibility. The discovery step, which is merely a fast phone chat, greatly shortens the typical trial method.

Cost: Unlike litigation, arbitration does not need as much legal study or expert witness preparation. The expenses of the arbitrator are typically split by the parties, making the arbitration system much less expensive.

Limitations 

1)Limited scope of arbitration 

Section 32 (4) and 48(2) of the Arbitration and Conciliations Act state the limitation of arbitration.

The Court may also refuse to allow the enforcement of an arbitral judgment if it determines that

(a)the dispute's subject matter cannot be resolved by arbitration under Indian law; or 

(b)The award's execution would go against Indian public policy.

Crimes, divorces, bankruptcies, testamentary matters, grants and issues of patents, and trademarks are all non-arbitrable issues.

2)No appeals are allowed; the arbitration award stands. There isn't a formal appeals procedure offered. Even if one side thinks the decision was biased, unreasonable, or unjust, they are unable to challenge it.