The law of arbitration in Pakistan is governed by the Arbitration Act, 1940
The Act provides for three classes of arbitration proceedings in the:-
- arbitration without court intervention
- arbitration where no suit is pending, and
arbitration in suits
- The parties to a dispute may invoke arbitration where there is an arbitration agreement.
- The arbitration agreement is a written agreement to submit present or future differences to arbitration.
- The person settling the dispute of the parties through arbitration is called as the arbitrator.
- The parties may name one or more arbitrators in the agreement or may appoint arbitrators pursuant to the disputes.
Where there is even number of arbitrators then amongst them one is to be chosen as Umpire and his decision will be final.
If a party to an arbitration agreement refuses to go to arbitration, the other party can seek intervention of the court to compel a reference to arbitration.
- The arbitrator must observe the essentiats of natural justice, failng which, the arbitrator's award can be set aside for misconduct
- In practice, arbitration is conducted on the basis of
- the pleadings (statement of claim and statement of defence),
- Framing of issues
- affidavits or testimony of the parties,
- oral evidence, and
Arbitration Award (judgment of the arbitrator)
The limitation of time as to the passing of award may be as per the arbitration agreement if specified or within 4 months of the commencement of hearing.
- The award shall be made by the arbitrator in writing and signed by him.
If there are more than one arbitrator, the majority view prevails.
ENFORCEMENT OF AWARD
- An award cannot be enforced, by itself. Judgment of the court has to be obtained in terms of the award.
- A court competent to hear the dispute if there were no arbitration between the parties, may be approached to enforce the award.
- The court may also set aside the award, on one or more of the following grounds, namely:-
- that the arbitrator or umpire has misconducted himself or the proceedings;
- that the award has been made after issue, by the court, of an order superseding the arbitration; or
that an award has been improperly procured or is otherwise invalid).
COST AND FEE
- The cost and fee is much less than the general litigation.
- There is no court fee required for the purpose of arbitration.
- However a fee for the arbitrators may be fixed for each hearing.