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Overview of Pakistan's Arbitration Act 1940

The document discusses the key differences between arbitration and litigation in Pakistan. Arbitration is a private, alternative dispute resolution process where a neutral third party arbitrator settles disputes, while litigation is a public legal process that occurs in courts. The arbitration process in Pakistan is governed by the Arbitration Act of 1940, which provides for three classes of arbitration and requires a written arbitration agreement. Arbitration awards must be made in writing and signed by the arbitrator. An arbitrator's authority can only be revoked with the court's permission or if the arbitration agreement allows for revocation.

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Mujeeb Ur Rehman Marwat
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289 views4 pages

Overview of Pakistan's Arbitration Act 1940

The document discusses the key differences between arbitration and litigation in Pakistan. Arbitration is a private, alternative dispute resolution process where a neutral third party arbitrator settles disputes, while litigation is a public legal process that occurs in courts. The arbitration process in Pakistan is governed by the Arbitration Act of 1940, which provides for three classes of arbitration and requires a written arbitration agreement. Arbitration awards must be made in writing and signed by the arbitrator. An arbitrator's authority can only be revoked with the court's permission or if the arbitration agreement allows for revocation.

Uploaded by

Mujeeb Ur Rehman Marwat
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

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Minor act (Arbitration act 1940, Court Fee Act, Stamp Act)
ARBITRATION: def:
Arbitration implies a non-judicial process in which a natural third
party is appointed for the resolving disputes between parties.
Arbitration is one of the methods of alternative disputes resolution,
which can be possible only with the consent of the disputing parties,
which is contained an agreement called arbitration agreement.
LITIGATION: def:
Litigation refers to a formal judicial process where in the parties
under disputed go to the court for its settlement.
It is a legal proceeding initiated between the opposing parties, with
the aim of enforcing or DEFENDING the legal rights.
DIFFERENCE BETWEEN ARBITRATION AND LITIGATION:
Following are the key differences between Arbitration and
Litigation;
(1)MEANING:
 Arbitration is a method of resolving the disputes in which a
natural third party is appointed.
 Litigation, on the other hand, is described a legal process in which
the parties resort to the court for the settlement of disputes.

(2)NATURE:
 Arbitration is always civil in nature.
 Litigation can be civil litigation or criminal litigation.
(3)PROCEEDINGS:
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 Arbitration is a private method of resolving controversies between


the parties.
 Litigation is a public proceeding.
(4)PLACE:
 The place of arbitration is decided by the parties seeking the
settlement.
 The litigation takes place in the court only.
(5)COSTS:
 The costs of arbitration process is comparatively lower than the
litigation.
(6)DECISION MADE BY:
 In Arbitration, it is an arbitrator, who is appointed by the parties, to
decide the matter.
 As against in litigation, the parties have no say, as to who will be
the judge to decide their case. The judge is appointed by the court.

ARBITRATION LAW IN PAKISTAN:


THE STATUTE: The law of arbitration in Pakistan is contained in the
arbitration act 1940. The act provides for three classes of arbitration;
i. Arbitration without court intervention.
ii. Arbitration where no suit is pending.
iii. Arbitration in suit.

ARBITRATION AGREEMENT (section-2):


Whatever be the class of arbitration there must on arbitration
agreement. As defined in the arbitration act 1940, it means “A written
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agreement to submit present or future differences to arbitration, whether


an arbitrators is named therein or not.
ARBITRATORS:
It means an independent person or body officially appointed to settle
a dispute.
The number of arbitrators can be one, two, three or even more. In the
case of even number of arbitrators, an umpire is to be appointed
according to the procedure given in the act.
Where the arbitration agreement does not specify the number, the
arbitration shall be by a sole arbitrator (First schedule).
THE AWARD:
The decision of arbitrators is known as an “Award”. The award has
to be in writing and signed by the arbitrator.
If there are more than one arbitrator, than majority will prevails.
UMPIRE:
When matter in dispute are submitted to two or more arbitrators and they do
not agree on their decision, it is usual for another person to be called in as umpire
to whose sole judgement.

SECTION 5:
Authority of appointed arbitrator or umpire irrevocable except by leave of
court.
GENERAL RULE:
General rule is that the authority of appointed arbitrator cannot be revoked.
EXCEPTION:
(i)Where there is a provision in the arbitration agreement; if an arbitration
agreement provides for revocation of authority of the arbitrator, then any party to
the arbitration agreement can revokes his authority.
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(ii)With the leave of court :


If there is no provision in the arbitration agreement for the revocation of the
authority of the appointed arbitrator or umpire, then the party can only apply to the
court for grant of leave to revoke the authority.
PROCEDURE FOR GRANT OF LEAVE:
(i)Application to the court,
(ii)Time for making application means, “an application must be made before
the award is delivered and
(iii)Notice to arbitrators.

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