Arbitration and tribunals

The essentials

Arbitration is a private method of dispute resolution in which parties agree to refer their dispute to one or more arbitrators whose decision, called an arbitral award, binds them. In India it is governed by the Arbitration and Conciliation Act, 1996, based on the UNCITRAL Model Law. Tribunals are specialised bodies set up by the State to decide particular kinds of disputes, such as service matters of government employees or environmental cases.

Key points

• Arbitration agreement: must be in writing; it may be a clause in a contract or a separate agreement.
• Features: parties can choose the arbitrator, venue and procedure; proceedings are confidential; the award is final and binding and can be enforced like a court decree.
• Court role is limited: an award can be set aside only on narrow grounds (for example, incapacity of a party, invalid agreement, lack of proper notice, or conflict with public policy); courts do not re-hear the merits.
• Institutional vs ad hoc arbitration: run by an institution under its rules, or arranged by the parties themselves.
• Tribunals: Article 323A (added by the 42nd Amendment, 1976) allows administrative tribunals for public service matters; Article 323B allows tribunals for other matters such as taxation and land reforms.
• Examples: the Central Administrative Tribunal (under the Administrative Tribunals Act, 1985), the National Green Tribunal (2010), and consumer commissions.
• L. Chandra Kumar (1997): tribunal decisions are subject to the writ jurisdiction of High Courts.

Exam tips

• Arbitration is consensual (based on agreement); tribunals are statutory (created by law).
• Remember the Act is of 1996 and covers both arbitration and conciliation.

Common mistakes

• Thinking a court will re-examine every fact in an arbitral award.
• Believing tribunal decisions are beyond any review by High Courts.