Cost-Benefit Analysis of Arbitration

Arbitration is a method to submit a resolution in an arbitral, rather than a judicial forum. For non-labor issues, arbitration can be a less expensive solution. One example is The Home Owners ' Warranty program. A program which aimed to resolve disputes between homeowners and builders. The program was designed between the Home Owners ' Warranty programs of the National Association of Home Builders. This program started in 1973 as a method of formally resolving disputes through arbitration. The program provided a warranty program, using mediation, and arbitration to resolve differences. Before the warranty program was created, the National Association of Home Builders came to the Federal Mediation and Conciliation Service for advice and assistance on dealing with homeowner disputes. Over the years, the program has expanded across the country through the Magnuson-Moss Bill, assisting the Federal Trade Commission on issuing rules on warranty’s and guaranties. The arbitration occurs while looking at the evidence of a dispute objectively for the best solutions (Barrett, 1985, p. 32).

Under certain circumstance, the arbitration process is more sophisticated and knowledgeable than those in the judicial proceedings. I was intrigued to find out that the arbitrator was more knowledgeable than the judge. In my opinion, it should be the other way around whereas the judge should be more understanding and practical on the subject in question rather than the arbitrator. Moreover, the purpose of the arbitration is to have a quick, simple, and efficient method to solve disputes.

Arbitration: This is an argumentative proceeding in which the parties choose an arbitrator or neutral third party to resolve the dispute. The process is less formal than the court room proceeding.

The independent arbitrator party makes a legally binding decision to resolve the dispute. Two parties in a dispute end up agreeing, and remaining on talking terms. Arbitration is important in commercial business disputes. The regulations of arbitration are set in the Arbitration Act 1996, which is usually a good thing to include in business agreements. It is very common in building contracts as a clause saying that in case of any dispute the parties will involved will use arbitration to solve their dispute instead of going to court to begin with.

However, eventually both parties are bound to disagree regarding a clause or the collective agreement as a whole, as some clauses can be written in vague language, and interpreting the agreement into a certain situation is not applicable in the full sense, which can also be due to uniqueness of the situation or act. These situation can be difficult to resolve simply between the two parties, and eventually the need for an unbiased and impartial body to decide to how to interpret the rights and clauses to the given situation, and prompt what can be as a fair yet a correct applicability of the clause, it is usually thought in order to get such ruling, the cases are directed toward the courts of law or governmental tribunals. Many organizations and unions will try and avoid to plea their cases to any government affiliated institution and opt out for an arbitrator. Arbitration is a technique used by most unions and organization, it is an option which provide a better benefits in regards to resolve disputes which may include factors such as the duration to which a court or tribunal may reach a verdict may over extend a reasonable time, as courts provide a system to which a judgment can be appealed, which may act as a burden on both unions and organization financially due to the proceeding of the petition, arbitration is a lot quicker regarding rendering a decision, as most of the decision evoked are binding and an appeal process is not available, in addition, some of the

On January 31, 2005, the Finnish Supreme Court gave its judgment in a case con¬cerning arbitrators' liability.; An arbitral award had been set aside as the chairman of the arbitral tribunal could have been challenged on grounds of which the parties, at whose request the award was set aside, had not been aware before the award was rendered. The arbitrator was found liable to compensate these parties, who had been claimants in the arbitral proceedings, for the costs and expenses they had incurred because of the arbitral

The third major resolution of ADR (alternative dispute resolution) method is Arbitration. In arbitration, the parties submit their dispute to an independent third-party, usually called the “arbitrator” or if more than one, then called the “arbitration panel” or “tribunal”. This neutral third-party envisions the evidence the disputing parties have submitted and deliver a decision called an “award.” The award is typically binding on the parties, yet, in some cases, the award can be non-binding.

Hence, International Arbitration, as one of the ADR methods, has become the principal method of resolving disputes between individuals, corporations and States. However, the exclusion effect of the Arbitration agreement upon national

Gary Born robustly argues that the anti-arbitration injunction should “virtually never be issued”, and if need be, only with the “utmost circumspection and only in rare circumstances”. This view, with respect, can be termed as too strict. Notwithstanding, it is important to recognise the potential of conflict between the courts and arbitral tribunals, and to take steps to mitigate this conflict.

Whatever be the type of dispute, the matter in dispute must be of Civil nature. Maters of criminal nature cannot be referred to arbitration. In most cases, references to arbitration

Such as no precedent system in solving the dispute as there are no records kept in the court about any sort of dispute therefore, the arbitrator or the mediator do not have any references to study about the dispute occurred. (Marson, 2013, P.640) Furthermore the dispute are not brought in the court, it is based on minor dispute compared to complicated and severe cases in court, thus it is hard to give advices that is based on legal acts. The decision made by the arbitration may not the accurate that caused uncertainty to the dispute and there’s no guarantee the decision would solve the conflicts. (www.lawmentor.co.uk) such as the case, Peach Grey v Sommers [1995] DC occurred where the arbitrator wrongly discharged his client’s request or

Negotiation, refers to the process of having the two sides come to an agreement without the help of an externality. This could be beneficial to both parties because they can come to an agreement of their own terms and both side win. Mediation is when a neutral authority brings both sides to the table to help solve the dispute. Benefits to doing this process, is that the mediator can provide alternatives to how to solve the dispute, although results are nonbinding. Arbitration is when a third party decides the outcome of a dispute. For the winning party is an advantage because the decision in not appealable, it only can be

rules give a definite meaning of the term ‘arbitral award’. The Working Group of the

The parties agreed in the arbitration would have the right to choose and appoint their preferred arbitrator. The arbitrator can be a construction professional or even a lawyer which in their opinion is suitable for the dispute arose. There is no specific statutory stated the number of arbitrator in each cases, thus it can be one or three arbitrators. However, in the event of failure to appoint an arbitrator from the consent of both parties, then the arbitrator shall be appointed by the body name in the arbitration agreement e.g. President of Pam or Director of KLRCA. The choice of the arbitrator or even pursuing arbitration itself is very much dependent on the nature of the dispute. The dispute that purely or predominantly involves technical issues of fact such as design, defects or valuation of the work is suitable for arbitration. However this may not be necessarily so where the dispute involves mixed issues of fact and law such as delay and extension of time or termination of the contract or that involves pure issues of law such as the interpretation of the

Arbitration is defined as “the submission of a dispute to one or more impartial persons for a decision, known as an award.1” It is a more effective means of handling disputes in a quick and concise manor. There is much customization available in an arbitration, however, Forced arbitration is a clause primarily used by large companies to speed up disputes and to help keep negative press coverage from effecting their company. Often, we see these clauses in banking agreements, cell phone companies and others corporations that have a very large consumer base.