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Arbitration – its Scope

June 15, 2021

Arbitration :-

A private dispute resolution mechanism agreed upon by the parties, P. Manohar Reddy & Bros. v. Maharashtra Krishna Valley Development Corpn.(2009) 2 SCC 494. Arbitration is a binding voluntary alternative dispute resolution process by a private forum chosen by the parties, Indian Oil Corpn. Ltd. v. Raja Transport (P) Ltd.(2009) 8 SCC 520. The determination of a matter in dispute by the judgment of one, two or more persons, called arbitrators, who in case of difference usually call in an ‘umpire’ to decide between them. Generally speaking, almost all matters in dispute, not being of a criminal nature, may be referred to arbitration; but at Common Law there was no mode of making the award binding. Arbitration means any arbitration whether or not administered by permanent arbitral institution, See. Section 2(1)(a), Arbitration and Conciliation Act, 1996 .

Certifier and arbitrator — There is a difference between an agreement for expert determination and an arbitration agreement. In Hudson’s Building and Engineering Contracts, 11th Edn., Vol. 1, in para 6.065, while making a distinction between a certifier and an arbitrator in a building contract, it has been emphasised that essentially the certifier in a construction contract will often the performing an administrative rather than a judicial function and when doing so, there may often be no formulated dispute before him at all. He has been described as “preventer of disputes” in contradistinction to an arbitrator whose function can only arise once a dispute is in existence. He is not under the same obligation to afford the parties or their representatives a full hearing and receive evidence from them. Thus each contractual provision may need to be carefully scrutinised to see into which category the person named falls.”, Bharat Bhushan Bansal v. U.P. Small Industries Corpn. Ltd.(1999) 2 SCC 166.

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