In India, two methods of dispute resolution that are gaining popularity are arbitration agreements and agreements for expert determination. Though they may seem similar, there are certain differences between the two that must be understood before deciding which method to choose.
Arbitration Agreement:
An arbitration agreement is a contract between parties that provides for the resolution of disputes through arbitration. The parties agree to submit their disputes to an arbitrator or a panel of arbitrators, who will issue a binding decision. The arbitration process is typically faster and less expensive than court litigation and is preferred by parties who wish to keep their disputes confidential.
Agreement for Expert Determination:
An agreement for expert determination, on the other hand, is a contract between parties that provides for the resolution of disputes through the determination of an independent expert. The expert is appointed by the parties and will make a non-binding decision on the matter in question. The parties then have the option to accept the expert’s decision or proceed to court litigation.
Difference between Arbitration Agreement and Agreement for Expert Determination:
The main difference between the two methods of dispute resolution lies in the decision-making process. In an arbitration agreement, the arbitrator’s decision is binding and final, whereas in an agreement for expert determination, the expert’s decision is non-binding.
Another significant difference is the nature of the decision-makers. In arbitration, the decision-makers are typically legal professionals, such as judges or lawyers, who are trained in the law and legal procedure. In contrast, an expert in an agreement for expert determination is usually a technical or industry expert who has specialized knowledge in the area of the dispute.
Furthermore, the procedure for each method of dispute resolution differs. In arbitration, the parties typically follow formal legal procedures, such as discovery and witness examination. In an agreement for expert determination, the expert’s decision is based on their independent analysis of the matter in question, without the need for legal formalities.
Conclusion:
Both arbitration agreements and agreements for expert determination offer an effective means of resolving disputes without going through the court system. While arbitration results in a binding decision, an agreement for expert determination results in a non-binding decision that can be accepted by the parties or followed by court litigation. The choice between the two methods of dispute resolution depends on the nature of the dispute and the preferences of the parties involved.