Arbitration Institutions: Roles and functions of major arbitration institutions, such as the ICC, LCIA, and AAA.

Introduction

Arbitration institutions help to resolve international commercial disputes by providing structured and neutral frameworks for arbitration proceedings. The International Chamber of Commerce (ICC), the London Court of International Arbitration (LCIA), and the American Arbitration Association (AAA) are some of the most well-known of these institutions.

With their professional administration, skilled arbitrators, and established procedural frameworks that support just and efficient dispute resolution, each institution makes a distinct contribution to the arbitration community. Maintaining confidence in arbitration as the go-to process for settling intricate international commercial disputes depends heavily on their roles and responsibilities.

What is Arbitration?

The most commonly accepted definition of arbitration is a process in which the parties involved agree to present their dispute to a non-governmental decision-maker known as an arbitrator. The arbitrator then conducts neutral adjudicative proceedings, allowing all parties to be heard and ultimately rendering a binding decision. According to Section 2(1)(a) of the Arbitration and Conciliation Act, 1996 “Arbitration means any arbitration whether or not administered by the permanent arbitral institution”. Thus, the courts established by law play no role in arbitration proceedings. Arbitration is typically a shorter and more informal process. Most people and businesses prefer arbitration as an alternative dispute resolution system. It has numerous advantages, including flexibility, time efficiency, privacy, and many others; however, with so many benefits, the larger question is whether to pursue litigation or arbitration for your case, the answer of which is determined by the nature, facts, and circumstances of the case.

The parties must agree to arbitrate. The most common way they do this is to include an arbitration clause in their commercial contracts. If there is no arbitration clause, the parties may agree to submit a dispute to arbitration after it has arisen. This is referred to as a Submission Agreement.

In the arbitration clause, the parties frequently agree on critical aspects of the arbitral process, such as the arbitral institution that will administer the arbitration, the number of arbitrators and how they will be appointed, the legal place of arbitration (also known as the “seat”), and the arbitration language. Sometimes they will specify the arbitration’s governing law (which does not have to be the same as the substantive law governing the contract).

International Arbitration

International arbitration is the preferred dispute resolution method for cross-border transactions due to its neutrality, ease of enforcement of awards, and the parties’ ability to choose their dispute decider.

In international arbitration, at least one of the disputing parties is a foreign national or, in the case of a corporation, is incorporated in a foreign country. In other words, one of the parties must be a foreign national or a permanent resident of a foreign country. In the case of a corporation, association, or body of individuals, core control and central management must be operated from outside India. It is also possible that one of the parties is a foreign government. Then such an arbitration is considered international. Section 2(1)(f) of the Arbitration and Conciliation Act of 1996 defines international commercial arbitration in terms of commercial disputes.

Arbitration Institutions

3.1.1 International Chamber of Commerce (ICC)

The International Chamber of Commerce (ICC) is an international trade association that provides policy advocacy and dispute resolution services, as well as involvement in the development of international trade rules and standards. It has a large global membership, with 45 million companies from 100 countries.

The ICC’s dispute resolution service is divided into two parts: the ICC International Court of Arbitration and the ICC International Centre for Amicable Dispute Resolution (ADR), which offers mediation services. These entities collaborate with the Commission on Arbitration and ADR, which develops and revises rules for dispute resolution. Furthermore, the ICC International Centre for ADR oversees the Documentary Instruments Dispute Resolution Expertise (DOCDEX), which offers dispute resolution services for trade finance instruments.
Another entity, the Governing Body.

3.1.2 London Court of International Arbitration (LCIA)

The LCIA charts its history from April 5, 1883.  In 1884, the committee proposed a tribunal led by the City of London Corporation and the London Chamber of Commerce & Industry. Nevertheless, the plan was created in response to a recognized and pressing need, and it was intended to be suspended until the English Arbitration Act of 1889 was passed. On November 23, 1892, the Chamber was formally inaugurated in front of a sizable and esteemed audience, which included the Board of Trade President at the time. There was also a lot of interest from the legal business community and the media. The tribunal was renamed the “London Court of Arbitration” in April 1903, and two years later it relocated from Guildhall to the London Chamber of Commerce’s nearby premises. For the following seventy years, the Court’s administrative framework stayed mostly unaltered.

An organization situated in London that offers the service of international arbitration is the London Court of International Arbitration, or LCIA as it is more commonly known. An organization situated in London that offers the service of international arbitration is the London Court of International Arbitration, or LCIA as it is more commonly known.

Even now, the LCIA is still among the largest organizations for permanent international arbitration. Even in “Ad hoc Arbitration” situations without the LCIA’s involvement, it publishes its guidelines and protocols that are widely followed.

3.1.2.1 Function of the London Court of International Arbitration (LCIA)

The primary duties of the LCIA Court are appointing tribunals, deciding arbitrator challenges, and managing expenses. The LCIA Court is the ultimate authority for the correct implementation of the LCIA Rules.

Although the LCIA Courts convene in plenary sessions regularly, the president, a vice president, or a court division handles the majority of the functions that the court is required to carry out under LCIA Rules and Procedures.

3.1.3 American Arbitration Association (AAA)

The Arbitration Society of America and the Arbitration Foundation merged to form the AAA in 1926 to resolve disputes outside of civil court systems.

A common provision in contracts is an arbitration clause designating the AAA as the arbitrator between the parties. Rather than mediating disputes directly, the AAA offers administrative assistance for arbitrations conducted before a single arbitrator or a panel of three arbitrators. Under its rules, the AAA may select an arbitrator in specific situations, such as when the parties are unable to agree on an arbitrator or one of the parties neglects to use its right to select an arbitrator.

3.1.3.1 Functions of The American Arbitration Association (AAA)

A non-profit organization focused on alternative dispute resolution (ADR) is the American

Arbitration Association (AAA). What it does is this:

Arbitration Services: By managing arbitration procedures, the AAA enables parties to settle conflicts out of court. It offers an impartial platform where an arbitrator renders legally binding decisions based on information put forth by both parties.

Mediation: The AAA provides mediation services to assist parties in reaching agreements through negotiation. Although mediation is not legally binding, it does promote cooperation and concession.

Rules and Procedures: To ensure efficiency and fairness in ADR processes, the AAA has created rules and procedures that have been proven by the courts.

International Arm: The AAA has been handling international commercial disputes since 1996 through its International Centre for Dispute Resolution (ICDR). This expands the AAA’s global reach.

Conclusion

The ICC, LCIA, and AAA are the three main arbitration organizations, and each has a distinct impact on the field of international arbitration. Their responsibilities are crucial to preserving the public’s trust in arbitration as the go-to process for settling intricate business disputes. These organizations guarantee that arbitration will continue to be a dependable and successful method of resolving disputes in the international sphere by offering strong procedural frameworks, skilled administration, and knowledgeable arbitrators.

References

1. https://indiankanoon.org/doc/1279791/
2. https://indiankanoon.org/doc/1566803/
3. Arbitration and Conciliation Act,1996, Dr. S. C. Tripathi, 6^th Edition,2012.
4. Negotiation Games, Steven J. Brams, 1^st Edition, 2003.