The law of arbitration in Pakistan is an important part of the business world. It is a crucial aspect for business owners, and investors for handling their business disputes. Arbitration law sets out regulations and procedures that must be followed when it comes to resolving disputes between two or more parties. So read on to find out all you need to know about the law of arbitration in Pakistan.
Introduction To The Law Of Arbitration In Pakistan
Arbitration is a process of resolving disputes outside of court, where one or more impartial individuals act as the decision-makers. The law of arbitration in Pakistan, also known as the Arbitration Act, was enacted in 1940 and has gone through several amendments over the years. This law applies to both domestic and international arbitrations that take place within Pakistan. The primary goal of the law of arbitration in Pakistan is to provide a quick, less costly, and fair mode to resolve disputes between parties. It is important to note that while arbitration is often used in commercial disputes, it can also be used in civil and criminal matters.
The Procedure For Initiating Arbitration
The procedure for initiating arbitration in Pakistan is straightforward. Firstly, the parties involved in a dispute must agree to resolve their issue through arbitration. Where the parties have agreed to pursue arbitration, they must select an arbitrator or panel of arbitrators. The arbitrator(s) chosen must be impartial and independent of both parties involved in the dispute.
After the arbitrator(s) are selected, the parties must submit their statements of claim and defense, as well as any relevant evidence, to the arbitrator(s). The arbitrator(s) will then hold a hearing where each party will have the opportunity to present their case and evidence. The arbitrator(s) will then make a decision based on the evidence presented and the applicable law. The decision made by the arbitrator(s) is final and binding on both parties.
It is important to note that the law of arbitration in Pakistan also allows for the recourse of challenging an arbitral award in certain circumstances. For example, if one of the parties can prove that there was bias or corruption on the part of the arbitrator(s), they may challenge the award.
What Are The Advantages Of Arbitration?
One of the main advantages of arbitration is its flexibility. Unlike traditional litigation, which can be expensive and time-consuming, arbitration allows parties to tailor the process to their specific needs. This can include selecting an arbitrator who has specific expertise in the subject matter of the dispute, agreeing on a specific timeline for the arbitration, and choosing the location where the arbitration will take place.
Another advantage of arbitration is its confidentiality. Unlike court proceedings, which are typically open to the public, arbitration hearings and awards are generally kept confidential. This can be especially important in commercial disputes where companies may not want sensitive information to be public.
Challenges Of Arbitrating Disputes In Pakistan
While arbitration can be a useful tool for resolving disputes in Pakistan, there are also some challenges associated with the process. One of the main challenges is the lack of trained arbitrators in the country. This can make it difficult for parties to find qualified arbitrators who are impartial and have the necessary expertise to handle complex disputes.
Another challenge is the slow pace of the arbitration process in Pakistan. While arbitration is intended to be a faster and more efficient alternative to traditional litigation, delays can occur due to a variety of factors, including the unavailability of arbitrators, procedural disputes between the parties, and challenges to arbitral awards.
Enforcement Of Awards In Pakistan
Once the arbitrator makes the arbitral award, the award must be enforced to be binding on the parties. In general, arbitral awards can be enforced in the same manner as court judgments, either through the civil courts or through an execution application filed with the relevant district court.
Conclusion
The law of arbitration in Pakistan provides a useful alternative to traditional litigation for resolving disputes. While there are some challenges associated with the process, such as the lack of trained arbitrators and the slow pace of proceedings, arbitration can be a more flexible and efficient way to resolve disputes than traditional litigation. As such, it is an important tool for both domestic and international parties doing business in Pakistan.
