Procedural Flexibility for ADR
Alternate Dispute Resolution (ADR) focusses on delivery of justice free from the complexities caused by the age old processes under which “Litigation” system works in our Courts.
An attempt to improve the litigation process has always been at the heart of any judicial reforms. One example for such attempt is Information Technology Act 2000 (ITA 2000) which introduced the system of Adjudication, as an “Enquiry” process and both Adjudicator and the Cyber Appellate Tribunal were freed from the procedural binding of the Civil Procedure Code while conferring the powers of the Adjudicator and the Cyber Appellate Tribunal equivalent to a Civil Judge.
The system of ADR introduces a whole new paradigm of Dispute Resolution where all desirable innovations can be introduced by an Arbitrator or an Arbitral Institution. No doubt that even these innovations can be challenged, but such objections are difficult to sustain unless it was proved to unfair. In the light of the systems like ODRGLOBAL.IN where the proceedings are recorded and would be available for proving whether the proceedings were conducted in a fair manner or not, objections on the ground of unfair treatment of one of the parties would be almost impossible.
We can therefore say that ADR in general and the unique process used by entities such as ODRGLOBAL.IN in particular, provides for innovation on the party of the Arbitrator that is within the legal process but would provide better convenience, quicker completion and lower cost. The Arbitrator should however take care that the provisions of Arbitration and Conciliation Act 1996 as amended in 2015 (ACA-1996/2016) should be followed diligently. We shall therefore examine some of the key requirements of the Act as regarding the conduct of the proceedings.
The parties to an arbitration first agree on the choice of the Arbitrator (or an arbitral institution which may finally appoint an arbitrator) and a process for appointing them right in the agreement. Once an Arbitrator is appointed to the satisfaction of the parties, the responsibility for the fair conduct of the proceedings pass onto the Arbitrator.
According to section 18 of the ACA-1996/2015, it is the responsibility of the Arbitrator to treat all parties with equality and give full opportunity to present their case. The Arbitrator is neither bound by the Code of Civil Procedure 1908 nor even the Indian Evidence Act as long as the principle of fairness can be proved.
In order to avoid any charge of improper procedure it is desirable that the Arbitrator follows a structured procedure which is also made known to the parties. This is done by arbitral tribunals by developing a set of “Rules of Arbitration” which is applicable to all arbitrations conducted under the aegis of the tribunal by its members.
Such procedure includes the following principal issues
1. How Place of Arbitration is fixed
2. How notices are served and acknowledged
3. How Counsels participate
4. How documents are exchanged
5. How the hearings are held
6. How arguments are presented
7. How witnesses are produced
8. How costs are split
9. How much time is allocated
10. How the award is delivered etc.
Where the parties usually live in different places and the Arbitrator is located in a different place, the choice of the Place of arbitration itself can be a point of contention since it does impose an extra cost of time and money on outstation parties. Unless both parties are located in the same town or they adopt the neutral venue as in the case of an ODR (Online Dispute Resolution) process, the choice of any town is bound to add an element of cost.
Some times, “Experts” are sought to be brought in as “Witnesses” and “Expert Counsels” are sought to be appointed if the subject matter of dispute needs technical or subject matter expertise for satisfactory resolution. If such experts are to travel and stay in the place of arbitration, the party using their services have to meet such costs. In small ticket disputes, these influence directly on the delivery of justice and the ability of the parties to have a satisfactory resolution.
Similarly, the number of hearings in which different parties need to assemble at a particular place multiples the cost unless solutions are found to either rotate the place of hearings between cities convenient to different parties or use of ODR is resorted to.
Also the procedure by which notices are delivered without loss of time and integrity and without providing excuses to any parties to claim non receipt is also a point to be considered while designing the procedure.
While the Arbitrator may be neutral to the way the costs are split between the parties which is a matter to be settled in the contract, he may define his fees as well as the cost of administration, cost of the meeting place to be paid if it is hosted by the Arbitral Institution, cost of travel and stay of the Arbitrator etc. and load it first onto the person who invokes the Arbitration and later based on the award.
If an Arbitrator wants to act as an independent entity not affiliated to any Arbitral Institution, then he needs to develop his own set of Arbitration rules which are reasonable and suit both the convenience of the parties as well as the requirements of the ACA-1996/2015.
In this context, it may be of interest for readers to study the “Model Rules of ODR” that are being formulated by the Global Forum of ODR Professionals working with ODRGLOBAL.IN which needs to be not only in conformity with ACA-1996/2015 but also the Information Technology Act 2000/8 as also the principles of the UNCITRAL Model Law on Arbitrations under development.
The Arbitrators can make use of the Model Rules as a template and tweak them with modifications that they find it necessary for their own Arbitration proceedings. If properly constructed, conveyed to the parties and consent obtained, the risk of the awards being challenged can be substantially reduced and the objective of fair and quick justice delivery which is the core theme of ADR will be realized.