methods of dispute settlement there are many


METHODS OF DISPUTE SETTLEMENT : There are many reasons due to which a dispute may arise between an exporter and an I importer. A common cause for dispute relates to quality. Under most contract terms, the importer will have an opportunity to inspect the goods only when the consignment reaches him. By that time, he may have already paid the value of the goods to the exporter. Therefore, restricting exports, etc.

There are two well recognised methods for settlement of disputes, i.e., litigation and arbitration. Litigation is not suitable for settlement of trade disputes due to time consuming process, high costs and uncertainty of the final decision. The basic limitations of litigations are:

I court process will probably slow, time consuming and formalistic.

ii.) Avoidable necessity of experts witness and other evidence

iii). Inconvenience to the parties

iv) Adverse Public Image

v) Bitterness and disruption of trade relationships

vi) Unfamiliarity of the laws and procedures of different countries

 These limitations encourage the arbitration for the settlement of various disputes. The basic advantages of arbitration are:

i) Quicktiess: Arbitration is much quicker than litigation. It can be completed as quickly as the parties want it, depending on the circumstances and the nature of the particular case. Under the Arbitration Act, the arbitrators have to make the award within four months from the date of entering on the reference. Usually an arbitration case may be settled between four months to one year.

ii) Inexpensiveness: The costs and expenses in arbitration are also much less that in litigation. The arbitration fees usually are around 2 per cent of the claim value or less in institutional abrogation. The other incidental expenses are also moderate and low.

iii) Promotes goodwill: Arbitration is a process of goods will and it helps promote friendly trade relations between the parties. The arbitrator is a person chosen by the parties themselves on the basis of their faith and, confidence in him.

iv) Sound and Cogent decisions: In arbitration it is possible to choose a person having knowledge and experience in the particular line of trade. This helps in avoiding the necessity of expert witnesses for educating the judge or for proving trade customs and practices.

v) Privacy: Arbitration proceedings are not open to public and arbitrator's decisions are not published in law reports like the court decisions. Therefore, arbitration preserves the privacy and trade secrets of the parties.

International Arbitration

In the case of international transactions, arbitration can take place either in the exporter's or importer's country. It is, therefore, necessary to have a legal system for the recognition and enforcement of arbitral award given in another country. The International "New York" Convention" on Recognition and Enforcement of Foreign Arbitral Awards 1957 has been ratified by 40 countries which recognise and enforce arbitral awards given in the countries which are signatories to his convention.

Law for Enforcement of Foreign Awards in India: Countries which are parties to any of the International Convention have to pass implementing legislation giving effect to the - respective Conventions. India, which is a party to the 1927 Geneva and the 1958 New York convention, has enacted the Arbitration (Protocol and Convention) Act. 1937 and the Foreign Awards (Recognition and Enforcement) Act, 1961, respectively, giving effect to the two Conventions. The provisions of the two acts are made applicable to foreign awards made in such countries as are notified by the Government from time to time in the Official Gazette under the respective Acts.

Procedure for Enforcement in India: Any person interested in a foreign award may. Apply in writing to any court having jurisdiction over the subject-matter of the award praying that the award be filed in the court. The application shall be numbered and registered in the court as a suit between applicant as plaintiff and the other parties as defendants. The court shall direct notice to be given to the parties requiring them to show cause why the award should not be filed. Thereupon, the court on being satisfied that the foreign award is enforceable under the act shall pronounce judgement according to the award. Upon the judgement so pronounced, a decree shall follow and no appeal shall lie from such decree except in so far as the decree is in excess of or not in accordance with the award.

Enforcement of Indian Awards in Foreign Countries: It is understood that awards made in India will be similarly enforceable in foreign countries which are parties to any of the international conventions relating to the enforcement of foreign awards (according to the provisions of the respective conventions). However, enforcement of awards in countries which do not adhere to either the 1937 or the 1961 convention or other similar international regulations is somewhat more difficult. The enforcement of awards in such other countries would largely depend on principles of private international law and might meet with' considerable difficulties.

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