Types of Arbitration and their Importance

Types of arbitration and their importance There are two types of Arbitration: 1. Voluntary Arbitration 2. Compulsory Arbitration Voluntary Arbitration is a binding, adversarial dispute resolution process in which the disputing parties choose one or more arbitrators to hear their dispute and to render a final decision or award after an expedited hearing Voluntary arbitration implies that the two contending parties, unable to compromise their differences by themselves or with the help of mediator or conciliator, agree to submit the conflict/ dispute to an impartial authority, whose decisions they are ready to accept. In other words, under voluntary arbitration the parties to the dispute can and do they refer voluntarily and dispute to arbitration before it is referred for adjudication. This type of reference is known as “voluntary reference”, for the parties themselves volunteer to come to a settlement though an arbitration machinery. The essential elements in voluntary arbitration are : § The voluntary submission of dispute to an arbitrator. § The subsequent attendance of witnesses and investigations. § The enforcement of an award may not be necessary and binding because there is no compulsion. § Voluntary arbitration may be specially needed for disputes arising under agreements. Compulsory Arbitration is a non-binding, adversarial dispute resolution process in which one or more arbitrators hear arguments, weigh evidence and issue a non-binding judgment on the merits after an expedited hearing. The arbitrator's decision addresses only the disputed legal issues and applies legal standards. Either party may reject the ruling and request a trial de novo in court. Compulsory arbitration is one where the parties are required to accept arbitration without any willingness on their part. When one of the parties to an industrial dispute feels aggrieved by an act of the other, it may apply to the appropriate government to refer the dispute to adjudication machinery. Such reference of a dispute is known as “compulsory” or “involuntary” reference, because reference in such circumstances does not depend on the sweet will of either the contending parties or any party to the dispute. It is entirely the discretion of the appropriate govt. based on the question of existing dispute, or on the apprehension that industrial dispute will emerge in particular establishment. Under compulsory arbitration, the parties are forced to arbitration by the state when: § The parties fail to arrive at a settlement by a voluntary method § When there is a national emergency which requires that the wheels of production should not be obstructed by frequent work-stoppages § The country is passing through a grave economic crisis § There is a grave public dissatisfaction with the existing industrial relations § Public interest and the working conditions have to be safeguarded and regulated by the state. Compulsory arbitration leaves no scope for strikes and lock-outs; it deprives both the parties of their very important and fundamental rights.

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