The Importance Of Arbitration

INTRODUCTION

A. ARBITRATION

Arbitration is the settlement of disputes by a third person (an arbitrator) who is neutral to both the parties of a contract, without going to the court of law.

Basically arbitration is voluntary in nature but it can be sometimes enforceable by law, if both the parties gives consent to bind by the decision of the arbitrator then it becomes binding arbitration, where the chosen attorney has full knowledge on the field of law. It is also known as alternative dispute resolution (ADR).

B. ARBITRATION CLAUSE

Arbitration clause is a provision or contract that deals with parties rights and options on a legal dispute where the parties resort to settle the dispute between them with the help of an arbitrator instead of

He recommended that in order to limit exposure to class actions and large jury awards. In the late 1990s, the National Arbitration Forum publicized its administrations to corporate lawyers, proposing that the main route for organizations to abstain from being subject in a lawsuit was to embed arbitration clause with class action waivers into their contracts. The Ross v. Bank of America class action alleged that major credit card companies unlawfully conspired amid the late 1990s to support enforcement of arbitration clauses via amicus curiae briefs and to include substantially indistinguishable arbitration clauses in their cardholder agreements. In August 1999, Consumer Reports wrote that over the past three years, the quantity of consumer arbitration clause has "expanded manifold", as indicated by the National Arbitration

Manufacturers Life Insurance Co. , the Bombay High Court decided that a clause providing that “no suit shall be brought against the company in connection with the said later policy than one year after the time when the cause of action accrues” was held valid. The court held in this matter that the agreement was not to limit the time but it was for providing that the parties will have to surrender their rights if no action is brought within that time. In National Insurance Co. Ltd. v. Sujir Ganesh Nayak & Co. , the court held that “the curtailment of the period of limitation is not permissible in view of S. 28 but extinction of the right itself unless exercised within a specified time is permissible and can be enforced. If the policy of insurance provides that if a claim is made and rejected and no action is commenced within the time stated in the policy, the benefits flowing from the policy shall stand extinguished and any subsequent action would be time barred. Such a clause would fall outside the scope of S. 28 of the Contract