People no longer recognize themselves as belonging to one particular country nowadays as the notions of traditional nationalism is dwindling day by day. ‘Global Citizens’, ‘Global Communities’…these are some of the terms people like to attribute themselves to. With the coming of Globalization, the world has seen a huge migration of people and businesses from one corner to the other. This has led to economies opening up their markets to foreign investments and an incredible surge in their growth. India is no stranger to this phenomenon. Formerly a socialist state with high amount of governmental control, India opened up its economy in 1992 to foreign investors. This led to India becoming the fastest growing economy in the world, a decade later. However, with such a huge influx of foreign investments and companies, disputes were bound to take place, be it with the govt or the local players. The Indian Judiciary, already burdened with lakhs and lakhs of pending cases, was ideally not the place where such disputes would be taken to by the commercial community, and therefore, alternative dispute resolution became the need of the hour. Arbitration and Conciliation Act, 1996 was the answer to this prayer. This act provided the framework for setting up arbitral tribunals or centres or institutions all over India and to speed up dispute resolution. Today, India, with world class arbitration institutions, is seen as one of the hubs of International Arbitration. Following are some of the pros of Arbitration over Litigation:
Flexibility in Scheduling: Court procedures are very harsh on someone who is seeking swift justice. Almost all of the time, one has to wait all day for his/her turn to come due to the huge number of cases that are pending. And even after waiting so many long hours, there is no guarantee that the judge will give a decision on the issue at hand; rather, the judge, with utmost certainty, give another date 2-3 months from the present.
Arbitration is more flexible in rescheduling case hearing. It takes into account the difficulties faced by the parties and strives to give a date which is mutually agreeable.
Faster: Arbitration proceedings are any day faster than Litigation. This is quite obvious from the fact that Judiciary is over burdened with other civil and criminal cases. A recent study by the Federal Mediation and Conciliation Services states that a final decision in arbitration is given within 475 days from the filing of the case; while in litigation, it usually takes somewhere around 18- 4 years. There are some cases which have been pending in Indian courts for more than 5 years; such is the grim situation of litigation in India.
Simplified Rules : Arbitration has simpler rules and its procedures are less complicated, even layman friendly, than Litigation. The rules of collecting evidence, procedure to be followed in court and other complicated intricacies of Litigation do not apply in Arbitration, paving way for more people friendly and efficient justice delivery mechanism.
Privacy Intact: Unlike open court hearings in Litigation, Arbitration proceeding s are very much a private affair. Proceedings are done in private and even the arbitral awards are given in private. Parties, at times, even agree to keep the decision of the final resolution confidential. This is not achievable in Litigation as only Reviews and Revisions are heard in chambers of the judges, while all other matters are held in open courts which means that, even the public can witness the proceedings.
Cost friendly: Arbitration is, to a certain extent, light on the pockets in comparison to Litigation. But due note is to be taken of the act that often ligation costs are high only because of unprecedented delays; as otherwise, Litigation would be cheaper than Arbitration.
If you have commercial disputes, it is a good choice to go for arbitration over litigation due to the above mentioned reasons. But for complete and comprehensive justice, Litigation is still the most preferred choice.
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