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    Thursday, 31 December 2015

    Aims and Objects of Arbitration Act

    1. Introduction
    The law of arbitration is not a new law in Pakistan. It was applied in British India through various regulations promulgated by the Presidency Governments of Bombay, Bengal and Madras. Then in 1859, it emerged in the form of an enactment known as Act VIII of 1859. In 1899 came the Arbitration Act of 1899, which was based on English Arbitration Act of 1899, which was applied to the Presidency towns and to such other local areas to which the Act was made applicable by the appropriate provincial Govt.  while the Arbitration in other parts of the country was governed by schedule II of the code of the Civil Procedure 1908 to remove the state of inconsistency, the present Act of 1940 has been passed and it came into force on 1st July, 1940 with object to promote settlement of disputes amicably through person, in whom both parties have trust.

    2. Meaning of Arbitration
    The word arbitration has not been defined by the Act, so it may be defined as under
    The determination of disputes by the decision of one or more person nominated by the parties to a dispute.

    3. Nature of Arbitration Act 1940
    Arbitration Act, 1940 is a consolidating Act and is a complete code relating to the matter of Arbitration. The provisions of this Act follow two main acts, though with some changes

    i. Provisions relating to arbitration without intervention of court follow the English Act.
    ii. The remaining provisions follow the provisions of second schedule to the code of Civil Procedure, 1908.

    4. Scope of Arbitration Act 1940
    The Act lays down the rules to be followed by the parties, arbitrators and courts but it is not exhaustive as some of its provisions may be excluded by parties by an express agreement between them. This act is applicable only to awards made as result of a reference made under this Act and not to awards filed under any other Act.

    5. No Retrospective effect
    By virtue of Section 48 of the Arbitration Act, 1940. This act has not retrospective effect and it is inapplicable to any reference, pending at the commencement of this Act.

    6. Condition Precedent for Arbitration
    The existence of arbitrable dispute is an essential condition for the purpose of arbitration. If there is no dispute, there can be no right to demand arbitration.

    7. Objects and Purposes of Arbitration Act, 1940

    Following are the objects and purpose of Arbitration Act, 1940

    i. To give Expeditious Relief
    One of the object of the Act is to give expeditious relief to parties unhampered by rules of procedure liad down in C.P.C 1908 and Evidence Act.

    ii. Not to prolong proceedings
    The arbitration has its purpose to not to prolong proceedings and to provide speedier remedy to the parties.

    iii. To consolidate the law of Arbitration
    One of the object of the Act is to consolidate and amend the law relating to arbitration so it may be taken as exhaustive Act of the law of Arbitration.

    iv. Enforce the Arbitration Agreement
    One of the object of the Act is to enforce the Arbitration agreement by which parties have decided and agreed to resolve their disputes through arbitrators.

    v. To give uniformity to the law
    The object of the Act is to give uniformity in the application of the law over the whole of the country.

    vi. To remove points of Differences Inexisting law
    The Arbitration act, 1940 has also a purpose to remove the points of differences in the existing law under CPC 1908 judgment entered in accordance with the award and a decree follows but under an act of 1899, an award was executable as a decree but it was not a decree for all purposes.

    vii. To give effect the choice of parties
    The Arbitration Act, 1940 give effect to the choice of the parties as regard the forum to which their disputes shall be taken.

    viii. To curtail litigation
    The purpose of Arbitration Act, 1940 is to curtail litigation in courts and promote settlement of disputes amicably through persons in whom both parties have trust.


    To conclude, I can say that the law favours a speedy and expeditious relief to the parties and also favours to avoid technicalities in the disposal of justice Arbitration Act 1940 fulfills these aims of law and provide the procedure to be followed by the parties and courts in deciding the dispute arising out of transaction in respect of which arbitration clause has been put in such an agreement. Arbitration in substance outsets jurisdiction of Court accepts for the purpose of controlling arbitrates, preventing misconduct and for regulating procedure after award.
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    Item Reviewed: Aims and Objects of Arbitration Act Rating: 5 Reviewed By: Usman Ali
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