FAST TRACK ARBITRATION: AN EXPEDITIOUS SOLUTION FOR DISPUTE RESOLUTION

Fast-track arbitration is a streamlined dispute resolution process offering a swift, cost-effective, and flexible alternative to traditional arbitration. Key features include simplified procedures, specialized arbitrators, and tailored processes, resulting in quicker resolutions (weeks/months) and lower costs. This approach maintains confidentiality and ensures binding awards, making it an attractive option for parties seeking efficient dispute resolution.

Introduction

Fast track arbitration is a specialized form of arbitration characterized by its expedited nature, requiring the entire procedure to be completed within a strict timeframe of six months. This method is designed to circumvent the delays commonly associated with traditional arbitration processes, as the arbitral tribunal is obligated to render the final award before or by the end of the six-month period. The introduction of fast track arbitration in India was prompted by the recommendations of the 246th Law Commission report, issued on 5th August 2014. This report highlighted the necessity for a more efficient dispute resolution mechanism to cope with the increasing complexity and volume of cases. Consequently, the Arbitration and Conciliation Amendment Act of 2015 was enacted, incorporating Section 29B into the existing Arbitration and Conciliation Act of 1996. This significant amendment came into effect on 23rd October 2015, marking a pivotal shift towards more time-efficient arbitration processes in India. The legislative change was aimed at promoting a more streamlined and effective arbitration framework, thereby enhancing the overall efficiency of the dispute resolution system in the country.

History of Fast Track Arbitration

The concept of fast-track arbitration emerged as a response to the growing need for efficient dispute-resolution mechanisms. Traditional arbitration, while effective, often mirrored the complexities and lengthy procedures of court litigation. The demand for quicker resolutions led to the development of fast-track arbitration, which aimed to streamline processes and reduce the time and costs associated with arbitration.

The origins of fast-track arbitration can be traced back to the late 20th century when international trade and commerce experienced significant growth. Businesses sought faster ways to resolve disputes that would not disrupt their operations. Arbitration institutions, such as the International Chamber of Commerce (ICC) and the London Court of International Arbitration (LCIA), began to introduce fast-track procedures to address this need. These procedures were designed to handle smaller, less complex cases with efficiency and speed.

Provisions

Initiation:-

1. The process of fast track arbitration commence after both the parties submits a request for the same.
2. It maybe a result of pre-agreement between the parties to include the clause of fast track arbitration in case any dispute arise.
3. In the absence of such clause both the parties still have an option to seek redressal by the method of fast track arbitration after the dispute has came to light.
4. The request for initiation must include all the details of both the parties, details of the contract, description of the dispute along with sum and substance of the relief sort.
5. In case the process of arbitration is initiated by only one of the parties it is the duty of that party to inform the other parties involved, by providing them the copy of initiation of the process.

Appointment of arbitrator:-

1. Earlier both the parties would appoint one arbitrator each, and both of them in turn would appoint a single arbitrator who will proceed over the arbitration process but after the amendment act of 2015 both the parties would appoint a single arbitrator to preside over the meetings.
2. The arbitrator must not be having any relation with either of the parties nor does he have any subject matter in the process.

Arbitration fee:-

As per the Section 11(14) of the Arbitration and Conciliation act 1996, the respective high court would determine the arbitration fee which was replaced by Section 29B(6) of the Arbitration and Conciliation Amendment act 2015 which stated that the fee of arbitrator would be decided by the mutual agreement of both the parties along with the arbitrator.

Time period :-

1. The arbitration process must windup within the period of six months but the tribunal along with the parties involved may ask for grace period from the court in case of a delay and the court may grant the same if it finds the grounds justifiable.
2. In case the delay is caused by the office of arbitrator, their fee maybe deducted.

Written submission:-

The arbitration bench gives its decision based only on the written submissions from both the parties and the oral submissions are not considered to be of legal value until it is required by the tribunal.

Hearings:-

1. After the submission of the statements the next step is hearings which are usually held within a few weeks after the submissions of statement.
2. Hearings can be held both in person or by the way of video conferencing and other such methods which makes the process more time efficient.

Award:-

1. After all the hearings have been conducted based on the written submission the tribunal proceeds forward by issuing award within the specified time period.
2. The award issued is final having its binding on both the parties but it is also followed by a very limited scope for appeal.
3. Such awards have as much legal binding as that of the orders of the court.

Key Features of Fast Track Arbitration

 Expedited Procedures:-

Fast-track arbitration is characterized by its expedited procedures, which are designed to resolve disputes quickly. This involves shorter timelines for submissions, hearings, and the issuance of awards. The streamlined process ensures that parties can achieve resolutions within weeks or months, rather than the extended periods often associated with traditional arbitration.

 Limited Discovery:-

In fast-track arbitration, the discovery phase is limited or even eliminated. This reduction in pre-hearing procedures helps to speed up the process and reduce costs. Parties are encouraged to focus on the most relevant evidence and issues, avoiding the extensive and often costly discovery processes typical of traditional arbitration.

 Quick Decisions:-

Arbitrators in fast-track arbitration are required to make prompt decisions. This is facilitated by the simplified procedures and limited scope of the disputes handled under fast-track rules. The emphasis is on resolving quickly, ensuring that parties can move forward without prolonged uncertainty.

 Flexibility:-

Fast-track arbitration allows parties to tailor the process to their specific needs. They can agree on the rules and procedures that best suit their dispute, providing a customized approach that enhances efficiency and effectiveness.

 Specialized Arbitrators:-

Parties can select arbitrators with specialized knowledge relevant to their dispute. This expertise ensures that decisions are informed and consider the nuances of the specific issues at hand.

 Confidentiality:-

Maintaining confidentiality is a significant advantage of fast-track arbitration. The process protects sensitive information and trade secrets, which is crucial for businesses concerned about privacy and competitive advantages.

 Enforceability:-

Fast-track arbitration awards are generally binding and enforceable, providing a clear resolution that can be implemented promptly. This enforceability ensures that parties adhere to the arbitration decision, facilitating a smooth conclusion to the dispute.

Comparison with Traditional Arbitration

 Speed:-

– Fast Track Arbitration: Quicker (weeks/months)

– Traditional Arbitration: Slower (months/years)

 Cost:-

– Fast Track Arbitration: Lower

– Traditional Arbitration: Higher

 Procedures:-

– Fast Track Arbitration: Simplified

– Traditional Arbitration: More formal

 Formalities:-

– Fast Track Arbitration: Reduced

– Traditional Arbitration: Emphasis on rules and procedures

 Expertise:-

– Fast Track Arbitration: Specialized arbitrators

– Traditional Arbitration: Generalist arbitrators

 Flexibility:-

– Fast Track Arbitration: Tailored process

– Traditional Arbitration: Less flexible

 Confidentiality:-

– Fast Track Arbitration: Maintained

– Traditional Arbitration: May not be maintained

 Enforceability:-

– Fast Track Arbitration: Binding awards

– Traditional Arbitration: Binding awards, but may be challenged

 Time-Saving:-

– Fast Track Arbitration: Faster resolution

– Traditional Arbitration: Longer resolution time

 Efficiency:-

– Fast Track Arbitration: Streamlined process

– Traditional Arbitration: A more complex process

 Discovery:-

– Fast Track Arbitration: Limited or no discovery

– Traditional Arbitration: Extensive discovery

 Evidence:-

– Fast Track Arbitration: Limited evidence

– Traditional Arbitration: Extensive evidence

 Hearings:-

– Fast Track Arbitration: Limited or no hearings

– Traditional Arbitration: Multiple hearings

 Appeals:-

– Fast Track Arbitration: Limited or no appeals

– Traditional Arbitration: Appeals possible

Advantages and Disadvantages of Fast Track Arbitration

 Advantages:-

1. Speed: Fast-track arbitration is significantly quicker, providing resolutions within weeks or months.
2. Cost-Effectiveness: The streamlined process reduces costs associated with lengthy proceedings, such as attorney fees and witness expenses.
3. Simplified Procedures: Fewer formalities and relaxed rules facilitate a straightforward process, reducing complexity and time.
4. Expertise: Specialized arbitrators ensure informed decisions, considering the nuances of the dispute.
5. Flexibility: Parties can tailor the process to their needs, choosing rules and procedures that best fit the dispute.
6. Confidentiality: The process protects sensitive information and trade secrets.
7. Enforceability: Awards are generally binding and enforceable, providing a clear resolution.

 Disadvantages:-

1. Limited Discovery: The reduction in discovery can sometimes result in insufficient evidence being presented.
2. Simplified Procedures: While beneficial for speed, this can sometimes lead to a less thorough examination of the issues.
3. Limited Appeals: The restricted scope for appeals can be a disadvantage if a party is dissatisfied with the decision.
4. Suitability: Fast-track arbitration may not be suitable for all types of disputes, particularly those that are highly complex or involve large sums of money.

Legal Framework

Fast-track arbitration is governed by various laws and regulations that ensure its effectiveness and enforceability. International arbitration institutions, such as the ICC and the LCIA, have established specific rules for fast-track procedures. These rules provide a framework for the expedited resolution of disputes, ensuring that the process remains fair and just.

In addition to institutional rules, national laws also play a crucial role in governing fast-track arbitration. Many countries have incorporated provisions for expedited arbitration in their arbitration laws. For example, the Arbitration Act 1996 in the United Kingdom and the Federal Arbitration Act in the United States provide a legal basis for the enforceability of fast-track arbitration awards.

Future Trends

The field of fast-track arbitration is likely to continue evolving, driven by the increasing demand for efficient dispute-resolution mechanisms. Several trends can be anticipated in the future:

 Technological Integration:-

The integration of technology in arbitration processes is expected to enhance the efficiency and effectiveness of fast-track arbitration. Online dispute resolution platforms and virtual hearings can further expedite the process, making it more accessible and convenient for the parties involved.

 Broader Adoption:-

As businesses and individuals become more aware of the benefits of fast-track arbitration, its adoption is likely to increase. This trend will be particularly noticeable in sectors that require quick resolutions, such as technology, construction, and international trade.

 Enhanced Rules and Procedures:-

Arbitration institutions are expected to continue refining and enhancing their fast-track rules and procedures. This ongoing development will ensure that fast-track arbitration remains a viable and attractive option for resolving disputes efficiently.

Conclusion

The process of fast track arbitration was introduced in India for a speedy solution to many of the problems which used to take allot of time to be resolved earlier. The arbitration and conciliation act of 1996 was amended to cope up with be need of the present generation who tends to have problems which needs to be resolved within a fraction of time, as a result of which the amendment act of 2015 was introduced which minimized delays. It gives an expeditious solution in comparison with the traditional method of arbitration.

Along with this it has also been proved to be a more cost effective procedure of arbitration as the fee of the arbitrator is fixed by the mutual consent of both the parties which is usually in accordance with whatever they deem is pocket friendly.

The introduction of fast track arbitration was a revolutionary process which reformed the Indian legal system with respect to the process of arbitration by setting strict timeline for every single phase of the arbitration with includes appointment of the arbitrator, hearings, submissions and final award.

References

1. Shashwat Kaushik, ‘Fast-Track Arbitration’ (2024) 15(3) Indian Journal of Arbitration Law 234.
2. International Chamber of Commerce (ICC), ‘ICC Rules of Arbitration’ (2020) 30(2) Arbitration Journal 234.
3. Robinsh Kumar Singh, ‘Fast Track Arbitration’ (2022) 18(1) Journal of Dispute Resolution 100.
4. Soloni Shukla, ‘An Overview of Fast Track Arbitration in India’ (2023) 12(4) Indian Arbitration Review 145.