Arbitration is a process of resolution of disputes outside courts through a private judge of the parties by whose decision or award they have agreed to be bound by. The arbitrator is required to ascertain facts in issue apply the law and provide relief to the aggrieved party.
According to Section 2(a) of the Arbitration and Conciliation Act, 1996 arbitration can either be institutional arbitration administered by a permanent arbitral institution or ad hoc arbitration.
Arbitration Agreement
An arbitration agreement is a written agreement to submit present or future disputes to a private judge of the parties for resolution by whose decision or award they have agreed to be bound.
An arbitration agreement can be an arbitration clause in a contract or a separate agreement.
A written arbitration agreement can be in a document signed by the parties or in an exchange of letters or contained in telex, telegram or other means of telecommunication, which provide a record of the agreement.
In course of exchange of pleadings, the existence of arbitration agreement alleged by one party and not denied by the other would be deemed to be written arbitration agreement.
An arbitration clause can be incorporated in a contract by reference to any other document. For example the general terms and conditions containing arbitration clause can be made part and parcel of the main contract through incorporation by reference.
The arbitration agreement may provide that arbitration shall be conducted in accordance with the Rules of an arbitral institution. In such case, those rules will form part and parcel of the arbitration agreement.
The following points should be considered when drafting an arbitration agreement.
