Introduction:
Arbitration offers a fair, efficient and cost-effective arbitration procedure for the settlement of disputes in commerce, trade and investment.
The dispute may be solved by one or three arbitrators, depending on the choice of the parties. If the Arbitral Tribunal shall consist of three arbitrators, each party appoints one arbitrator who in-turn will appoint the third arbitrator. The organization for the Arbitration can also appoint the panel of arbitrators on the request of the parties. If the Arbitral Tribunal shall consist of one arbitrator the parties will be given an opportunity to jointly appoint the arbitrator.
A final award shall be made within 6 months under the SAARC Arbitration Rules 2016[1]. SAARC Arbitration Rules provide the necessary mechanism for the effective and efficient carrying out of the Arbitration proceedings and all matters ancillary thereto. These rules have been in place after the approval of the Governing Board of SARCO. SARCO follows the internationally acclaimed and accepted UNCITRAL Model Law, and is abreast with the changes in these Rules, as and when they are proposed to be reformed or updated.
Likely to clarify the term used in the title before menacing over the nucleus of the topic, a brief connotation of ‘‘Access to Justice’’ (hereinafter referred as ATJ), ‘‘Rule of Law’’ (hereinafter referred as ROL) and ‘‘Alternative Dispute Resolution System’’ (hereinafter referred as ADR) would be worth making clear.
The expression ‘‘Access to Justice’’ ATJ is one of the components of ‘‘Rule of Law’’ ROL therefore it is not difficult to understand the inextricable relationship between these two. ATJ generally infers someone having proper admittance to the court and a guaranteed legal representation.[2] However it has further been defined as the ability of people to seek and obtain a remedy through formal or informal institutions of justice for grievances in compliance with the human rights standards.[3]
On the other hand the principle of ROL symbolizes that all the people and institutions are subject to and accountable to the laws of the country that are fairly applied and enforced.
The most common invention of ADR has been to resolve disputes between and among the parties without trial. It is an alternative to the court. Going to the courts in terms of mitigating disputes or to adjudicate matters, is often painstaking that the parties to a case may feel very disappointed and hopeless at times.Cost is another vital factor along with issue of unnecessary delay as to why people nowadays lean more to ADR rather than to the courts.
Historical Background of SAARC Arbitration and ADR:
SAARC Arbitration Council, (SARCO) is one of the Specialized
Bodies of South Asian Association for Regional Co-operation (SAARC), comprising
the Member States, Islamic Republic of Afghanistan, People’s Republic of
Bangladesh, The Kingdom of Bhutan, Republic of India, Republic of Maldives,
Federal Democratic Republic of Nepal, Islamic Republic of Pakistan and
Democratic Socialist Republic of Sri Lanka.
It is an inter-governmental body mandated to
provide a legal framework/forum within the region for fair and efficient
settlement of commercial, industrial, trade, banking, investment and such other
disputes, as may be referred to it by the member states and their people.
With these objectives in mind, SARCO aims to
establish a quality alternative dispute resolution forum, that would act on
behalf of governments and the people of SAARC Member States, having
professionals, retired judges and eminent lawyers from Member States on its
Panel of Arbitrators and conciliators for the out-of court resolution of
disputes, arising from commercial agreements, usually by including SARCO model
clause for the arbitration of future disputes in their contracts in domestic
and international commercial trade, investment, transactions and in similar
other international relationships.
SARCO enables the parties to a dispute from
different legal and cultural backgrounds to resolve their disputes, without the
formalities of going through a judicial process. The South Asian States met in
Dhaka Bangladesh in 1985, and decided to establish South Asian Association for
Regional Cooperation (SAARC) in order to foster closer relationship among the
member nations and also to assist each others in their development strategies.
Having studied the importance of alternate dispute resolution mechanisms
available in the world, in 2004 the Council of Ministers, at its 243 session
held in Islamabad Pakistan decided to establish Conciliation and Arbitration
mechanism for the region under the auspices of SAARC. Hence in 2005 the
agreement for establishment of SAARC Arbitration Council was signed at the
summit in Dhaka, Bangladesh.
Very succinctly the historical background of ADR is that the first commencement of using ADR to resolve disputes between the then kingdoms can be traced back to 1800 B.C. Mari Kingdom (in modern Syria) where mediation and arbitration were used in resolving disputes with other kingdoms[4]. That was the first time ever the hint of using ADR was conceptualized. Later the apparatus of ADR came with different reasons and needs at different times both in formal and informal ways. However formal ADR in the name of court annexed ADR came to the hub of the discussions in United States back in 1970. United States is told to be the pioneer of ADR’s modernization and development. In a speech in 1976 Warner Burger CJ conversed about the then problems of the judicial system of the USA. He focused on few areas like delay, high costs, and unnecessary technicality. He stated the whole system as an inefficient one that caused delay and expenses diminishing the value of the judgment. In terms of exterminating such impediments the Chief Justice made few proposals to reform stressing more on the greater role of ADR namely formal ADR that is to say the court annexed arbitration[5]. The formal ADR since then has been developing fastening different slants to its shape.
ADR in general includes informal mechanisms (negotiation, mediation, reconciliation and arbitration). However the court annexed arbitration is formal though like other apparatuses of ADR it also cannot make any precedence. Gauging the definition of ATJ, it can be said that someone having an access to ADR in terms of adjudicating a matter that complies with the norms of international human rights falls within the definition of ATJ. Since ADR mostly involves informal mechanisms therefore it may not always follow the normative rules of the country and hence falling outside the ambit of ROL. Though for court annexed arbitration, guidelines have been enunciated in the Arbitration Act, 2001 (Bangladesh Perspective). The Arbitration Act, 2001[6] is based on the UNCITRAL Model Law. However, on certain aspects the provisions of the 2001 Act differ and some of the major differences can be stated thus: Section 11 of the 2001 Act deals with the number of Arbitrators and mandates that, unless otherwise agreed between the parties, the number shall not be even. The Model Law permits the parties to approach a Court or Authority for appointment of a third Arbitrator or Sole Arbitrator as the case may be, in cases where the parties fail to reach an agreement. Under the 2001 Act, this power in the case of the domestic arbitration is vested with the District Judge and in case of international commercial arbitration this power is given to the Chief Justice or any Judge of the Supreme Court designated by him.
ADR (‘‘Alternative
Dispute Resolution’’) in Bangladesh Civil Procedure Code 1908 Part V as Special
Proceedings make compulsory in the administration of Civil Justice System.
Section ‘‘89B.(1) If the parties to a suit, at any stage of the
proceeding, apply to the Court for withdrawal of the suit on ground that they
will refer the dispute or disputes in the suit to arbitration for settlement,
the Court shall allow the application and permit the suit to be withdrawn; and
the dispute or disputes, thereafter, shall be settled in accordance with Salish
Ain, 2001 (Act No. 1 of 2001) so far as may be applicable:
Provided that, if, for any reason, the
arbitration proceeding referred to above does not take place or an arbitral
award is not given, the parties shall be entitled to re-institute the suit
permitted to be withdrawn under this sub-section.
(2) An application under sub-section (1) shall
be deemed to be an arbitration agreement under section 9 of the Salish Ain,
2001 (Act No. 1 of 2001).]
In Bangladesh very recently
by enacting new provision in Civil Procedure Code 1908 added new section 89E
make ADR as obligatory both for the judges and the lawyers. That section 89E. (1) States; The provision of section 89A or 89C shall
be, applied to such area, and commenced on such date, as the government may, by
notification in the official Gazette, fix.
(2) Where any mediation process for settlement
of dispute in respect of any suit or appeal is pending under section 89A or 89C
before the commencement of the Code
of Civil Procedure (Amendment) Act, 2012, such mediation
shall continue as if the provision of section 89A or 89C were not
amended by the Code of Civil Procedure (Amendment) Act, 2012.]
It is occasionally thought that having someone an access to the ADR is probably be adequate in terms of fulfilling the conditions of ROL, however this is not the case since ATJ is one of the elements ROL but not the sole one. Meeting the terms with the state law is an eminent characteristic of ROL. Thus in theory any wavering mentality towards the compliance with the laws of the country in any circumstance does not fall within the ambit of ROL.
To provide justice has been one of the foremost motives of ADR but since it is an informal mechanism of dispute settlement therefore it is not bound to follow the state laws. Question arises there, is ADR not consistent with ROL? If the answer is no, then how can ADR ensure justice without the compliance with the state law which is the innate element of ROL? However if ATJ and ROL are to be seen from two different slants then it could be said that ATJ is a precondition to ROL and there should not be any doubt in this regard.
Approaching to the first question put above, it has been supposed at different times that informal ADR comply does not comply with the ROL and hence is unable to serve justice.[7] Along with other predicaments it has been argued that through informal ADR females are sometimes aggrieved in the process of questing justice since they are told to be less powerful and deprived sects of people may not get justice that they require[8]. However there are few sects of people who take ADR as an important vehicle in terms of modernizing legal system[9].
To answer the above importuned second question, the word justice has to be seen from a broader perspective where it does not only bother with the enacted and case laws of the country besides includes social ethos, needs, equality, rights of the individuals and so on. And that could be the only possible way to slot ADR in the domain of ROL. A famous saying of Roscoe Pound ‘‘While law may serve justice, justice can be broader than law’’ is worth remembering in this regard.[10] On a counterpart another controversy arises to the extent that do the laws of the country not entail social needs, ethos, beliefs and issues relating to individuals’ rights? However it is not wise to point at state laws outright, it needs an imperative inspection before any state law can be criticized.
Law can be divided into two sorts’ substantive law and procedural law. Substantive law deals with those areas of law which establishes the rights and obligations of individuals, what individuals may or may not do. Procedural law copes with matters regarding the winning enforcement of substantive law. Substantive laws can be of help for the mediator and arbitrator in terms of mitigating disputes between the parties in both the formal and informal ADR though it is not obligatory for them. It could on the other way round be said that if an act is deciphered as an offence according to its definition given by law, can in no way be termed as anything else but a misdemeanor that is where the stagnant nature of substantive laws lies. It is the procedural law that does not have any implementation at all in ADR. The reason here is, where substantive laws are not being applied directly, how would the laws relating to its implementation apply there. Parties to disputes have greater control over the procedural facets in ADR. However for formal ADR procedural guidelines have been enshrined in the statute. In Bangladesh, the procedural aspects of formal ADR have been set down in Arbitration Act, 2001.
Arbitration in Bangladesh:
Arbitration in Bangladesh is governed by the Arbitration Act, 2001 (“the Act”). Section 9[11] of the Act sets out the necessary elements to be contained in an arbitration agreement and states that it may be in the form of an arbitration clause in a contract or in the form of a separate agreement. An arbitration agreement that would be recognized by the court includes written documents signed by the parties, exchange of letters, telex, telegrams, fax, e-mails or other means of telecommunication providing a record of the agreement or an exchange of statement of claim and defence in which existence of the agreement is alleged by one party and not denied by the other.
Jurisdiction:
Are there any
subject matters that may not be referred to arbitration under the governing law
of your country? What is the general approach used in determining whether or
not a dispute is “arbitrable”?
Section 54 of the Arbitration Act, 2001[12] states that the Act is
not applicable to the Industrial Relations Ordinance, 1968 or to any other law
making special provisions for arbitration. The Arbitration (Protocol and
Convention) Act, 1937 and the Arbitration Act, 1940 have been repealed by
section 59(1). The saving clause provides that the repealed enactments shall be
applied in relation to the proceedings which commenced before the Act came into
force. Section 10(1) of the 2001 Act makes it obligatory on the part of the
judicial authority to refer the parties to arbitration if action brought before
it is a matter which is covered by the arbitration agreement, provided such
request is made not later than submitting to the Court the first statement on
the substance of the dispute. Pursuant to Section 10(2), the Court, if it is
satisfied that an arbitration agreement exists, refers the parties to
arbitration and stays the proceedings, unless it finds that the arbitration
agreement is void, inoperative or incapable of determination by arbitration.
Decisions under the old Arbitration Act, 1940 would have a bearing on this
issue. Under the old Act a Court decided on the facts of each case whether
sufficient cause had been made out or not for the dispute to be referred to
arbitration and in doing so, the Court was not limited to the kind of causes
referred to in the Arbitration Act. When the dispute required investigation
into the charge of fraud the court could have refused to refer the matter to
arbitration. When the dispute between the parties raised difficult and
complicated question of law which required a decision by the court, it could
have refused to refer the dispute to arbitration. The Court also considered the
conduct of the applicant and considered whether such conduct was sufficient
cause for not making the reference. Moreover, undue delay could be sufficient
cause for not ordering the reference.
Arbitration and Conciliation in India:
INDIAN BARE ACTS
THE ARBITRATION AND CONCILIATION ACT, 1996 No.26 of 1996 [16th August,
1996][13]
An Act to consolidate and amend the law relating to domestic arbitration,
international commercial arbitration and enforcement of foreign arbitral awards
as also to define the law relating to conciliation and for matters connected
therewith or incidental thereto. WHEREAS the United Nations Commission on
International Trade Law (UNCITRAL) has adopted the UNCITRAL Model Law on
International Commercial Arbitration in 1985: AND WHEREAS the General Assembly
of the United Nations has recommended that all countries give due consideration
to the said Model Law, in view of the desirability of uniformity of the law of
arbitral procedures and the specific needs of international commercial
arbitration practice; AND WHEREAS the UNCITRAL has adopted the UNCITRAL
Conciliation Rules in 1980; AND WHEREAS the General Assembly of the United
Nations has recommended the use of the said Rules in cases where a dispute
arises in the context of international commercial relations and the parties
seek an amicable settlement of that dispute by recourse to conciliation; AND
WHEREAS the said Model Law and Rules make significant contribution to the
establishment of a unified legal framework for the fair and efficient settlement
of disputes arising in international commercial relations; AND WHEREAS it is
expedient to make law respecting arbitration and conciliation, taking into
account the aforesaid Model Law and Rules; BE it enacted by Parliament in the
Forty-seventh Year of the Republic of India as follows:-
PRELIMINARY Short title, extent and commencement:
This Act may be called the Arbitration and Conciliation Act, 1996.
It extends to the whole of India: Provided that Parts, I, III and IV shall
extend to the State of Jammu and Kashmir only in so far as they relate to
international commercial arbitration or, as the case may be, international
commercial conciliation. Explanation: In this sub-section, the expression
“international commercial conciliation” shall have the same meaning
as the expression “international commercial arbitration” in clause
(f) of sub-section (1) of section 2, subject to the modification that for the
word “arbitration” occurring therein, the word
“conciliation” shall be substituted.
Arbitration and Conciliation in Maldives:
Maldives Arbitration is a dispute resolution process in which a neutral Maldives Arbitrator is selected and empowered to make a decision between parties having complaints or dispute. The Maldives Arbitrator hears the disagreement and evidence presented by each party. After careful review considering all relevant information, the Maldives Arbitrator will issue an award to the party having the stronger case. Maldives Arbitration decisions may be either binding or non-binding, depending on the terms of the arbitration clause agreement. Binding arbitration decisions have the same significance as a court judgment. The Maldives Arbitrator award cannot be reviewed by a court, and there cannot be an appeal of the Maldives Arbitrator’s decision. Maldives Arbitration is considered less expensive and a quicker dispute resolution alternative than through Court litigation. Maldives Arbitration can resolve disputes confidentially. Generally, an Arbitration Clause is inserted into an agreement contract between the parties which will specify Maldives Arbitration instead of resolving disputes in Maldives Court. Arbitration Clause should be reviewed by an attorney. If an Arbitration Clause does not exist, both parties can mutually agree to have their dispute resolved by Maldives Arbitration. The Maldives Arbitrator is a knowledgeable trained professional who conducts the Maldives Arbitration. In the Maldives Arbitrator Directory you will find Maldives Arbitrators and their expertise. Select the Maldives Arbitrator who has expertise in your dispute. For example, a dispute involving an employment agreement may be best handled by the Maldives Arbitrator with expertise in Maldives employment law and labor contracts. What types of disputes can be arbitrated through Maldives Arbitration? Any type of disagreement can be arbitrated, including disputes involving businesses and consumers, employment claims, real estate and construction issues. Maldives Arbitration is utilized when there is an adversarial situation and the parties wish to resolve the dispute in private without court litigation. If legal action is necessary, before contacting a Maldives Arbitrator, we suggest that you -educate yourself on law and the legal process by reading the books mentioned in our recommended reading section.
Clash between Islamic ADR/ Arbitration and Western ADR/Arbitration:
It is visible that although we are living in an era of globalization, there still lies a great deal of difference between cultural outlines of Arab-Islamic society and the West. Deep rooted affection of family life, unique customs of generosity and its traditions of divergence resolution are still the determining factors of Arab-Islamic World. They are so attached to the collectivist kin-based society where an individual’s tribe and linage get precedence more than anything else in almost every sphere of life[15]. West. Dale F. Eickelman in this regard stated that, ‘‘while rustic nomadic has declined quickly in favour of village and city based models of social life, nomadic people and their traditions have left a deep mark on Middle Eastern culture, society, and politics.’’[16]
Many institutional legal systems in the Arab-Islamic World are yet to have outright openness in the society and therefore is clandestine. Sulh is one of them, which until today is undergone through private network e.g. Imams and Sheikhs. By doing this they try to prevent the discord from being in the public domain which also heals the relationships between the disputants in quick time and exterminate any further dissension between them.[17] It is definitely a very good ploy since sulh is Arab-Islamic word and is not only used in commercial disputes but also in family related discord to a greater extent. Therefore, keeping things within the ambit of the family or somewhat stealthy for the others is wiser. It does avoid the relationships between the parties from further deterioration.
Western culture and ethos on the other hand prioritize individualism. Contrasting the Arab-Islamic World, in most of the given structure other than anything else the interests of the individuals are preferred. Such is also the case in dispute resolution, no relationship or exterior factor e.g. social wrench can ever have any impact on their dispute resolution. In terms of choosing the arbitrator in western societies, unlike the Arab-Islamic World the prospective arbitrator does not have to be from the same community or society as of the disputants. Arnaud Ingen-Hous while differentiating between Islamic ADR and Western ADR states that: ‘‘The East spotlights on a procedure that is intuitive and informal while the West focuses on one that is cognitive and formal…While conflict resolution in the West focuses on the individual, in the East the individual is entangled with their own group or tribe.’[18]’ It seems to be never ending debate since none of the concepts can ever be discarded outright and a closer inspection would reveal both the notions have positives and negatives which very much depend on the standpoints of the individuals. Moreover cultural factors are the biggest impediments which do not allow us to make an assimilation of Arab-Islamic societies and western societies.
The idea of ADR is to resolve disputes between the disputants in a way so that they can save money, time and resolve their problems in an amicable environment. To me resolving disputes upholding the rule of law in any kind of mechanism is acceptable. Keeping things secret and within the range of informal networks cannot always bring justice whereas openness and individualism do not ensure justice at all times either. Else no one on earth would have ever been aggrieved by any judicial decision where the process is so open, formal and official.
Conclusion:
Any dispute,
controversy or claim arising out of or relating to this contract, or the
breach, termination or invalidity thereof, between
the parties shall be settled by arbitration in accordance with the SAARC
Arbitration Rules as at present in force, and
the award made in pursuance thereof shall
be binding on the parties. In ADR the mediator or arbitrator plays vital
role since no law is imposed on them as to how they would adjudicate the matter
between the disputants. The nature of ADR is of adversarial system as a result
of which the decision taken by any mediator or arbitrator depends on the
evidences along with their scruples. Rather than interpreting any state law, they use their brain wave in terms of
a successful adjudication of a dispute which could at times be unique in
nature. On the other side unlike the procedural hurdles of the court there is no such technical
or ceremonial intricacy in ADR. It is rather seen that parties to ADR seem to
be inclined to mitigate their problems in a friendly environment which is not
attainable in the court. The model of Section 89A-Mediation
89B-Arbitration-89C-Mediation in Code of Civil Procedure Code/ADR in Bangladesh
has been initiated to ease the pressure of the court. It is in no way adversary
to the mainstream legal system nor to the Rule of Law.
[1] SAARC Arbitration Rules 2016
[2] UNDP, “Access to Justice,” 2004
[3] United Nations Development Programme, Programming for Justice: Access for All: A Practitioner’s Guide to Human Rights-Based Approach to Access to Justice (Bangkok: UNDP, 2005). Hereafter: UNDP, Programming for Justice, 2005
[4] ‘‘A History of Alternative Dispute Resolution’’ -The Story of a Political, Cultural, and Social Movement, Jerome T. Barrett with Joseph P. Barrett, Published in Affiliation with The Association For Conflict Resolution
[5] Warren E Burger, Agenda for 2000 A.D.: A need for Systematic Anticipation, 70 F.R.D. 83, 92 (1976).
[6] The Arbitration Act, 2001
[7] Lon L. Fuller, The Morality of Law, 38-39 (1964).
[8] Trina Grillo, The Mediation Alternative: Process Dangerous for Women, 100 Yale L.J. 1545 (1991).
[9] Jean R. Sternlight, Is ADR consistent with the Rule of Law? De Paul Law Review 569 (2006).
[10] Roscoe Pound, The Causes of Popular Dissatisfaction with the Administration of Justice, 40 Am. L. Rev. 732-733 (1906).
[11] Section 9 Arbitration Act, 2001 (“the Act”).
[12] Section 54 of the Arbitration Act, 2001
[13] INDIAN BARE ACTS THE ARBITRATION AND CONCILIATION ACT, 1996 No.26 of 1996 [16th August, 1996]
[14] Pakistan THE ARBITRATION ACT (X OF 1940) [11th March, 1940
[15] Hamad al-Humaidhi, ‘‘Sulh: Arbitration in the Arab-Islamic World, Arab Law Quarterly 29 (2015) 92-99, p.96.
[16] D. Eickelman, The Middle East and Central Asia: An Anthropological Approach (New York: Prentice Hall, 1997)
[17] Hamad al-Humaidhi, ‘‘Sulh: Arbitration in the Arab-Islamic World, Arab Law Quarterly 29 (2015) 92-99, p.97
[18] Arnaud Ingen-Housz, ‘‘ADR in Business: Practice and Issues across Countries and Cultures) (Dordrecht: Kluwer Law International, 2006)
