Arbitration is one of the forms of Alternative Dispute Resolution system. It is a structured process and regulated in Pakistan under the Arbitration Act,1940. The process is less cumbersome as compared to the formal court litigation system, however a little bit expensive on account of Arbitrator's fee. The parties involved in any dispute can mutually agree in writing either before going to the court or during the court proceedings to get their dispute decided through Arbitration process.
It depends upon the arbitration agreement whether each party nominates its own arbitrator or they agree on one Arbitration called sole Arbitrator to decide the dispute . The judgement given by the Arbitrator is called Award. The Award is filed in the court of law having jurisdiction by the Arbitrator to make it Rule of the court. The Rule of he court is final and executable.
It is the prerogative of the Arbitrator to follow any procedure for the completion of the arbitration proceedings as the provisions of the Civil Procedure Code are not strictly applicable but the procedure adopted by the Arbitrator must not be violative of principle of natural justice. The provisions of Quanoon-e-Shahadat Order, 1984 are also not applicable in these proceedings. The parties can agree in the beginning on the type of evidence and quantum of witnesses to be produced during the proceedings.
The number of arbitrators can be one, two, three or even more. In the case of an even number of arbitrators, an Umpire is to be appointed according to the procedure given in the Act (First Schedule). Where the arbitration agreement does not specify the number, the arbitration shall be by a sole arbitrator (First Schedul of the Arbitration Act) If there is more than one Arbitrator and they are neither unanimous nor majority view is possible then the Award is to be referred to the Umpire for his decision as a referee. The Umpire is also nominated by the parties prior to the start of the arbitration proceedings. The decision of the Umpire is final and is filed in court to make it Rule of the court.
The court on receiving the Award issues notices to the parties for their information and they can file objections, if any. The court can hear the objection and decide the same before making the Award as the Rule of the court.
The scope of the objections on the Award is very limited i.e. Only to the extent of misconduct of the Arbitrator and its jurisdiction.
The Arbitrator must give reasons in support of Award failing which the same can be declared illegal.
An appeal lies against the Rule of the court. Type your paragraph here.