For an arbitrator goes by the equity of a case, a judge by the law,
and arbitration
was invented with the express purpose of securing full power for equity. - Aristotle

Through his quote, Aristotle has clearly defined the paramount role that arbitration plays in seeking justice. Arbitration is a process by which parties refer, usually voluntarily, their disputes to an impartial third person, an arbitrator, selected by them for a decision based on the evidence and arguments to be presented before the arbitration tribunal.

With the soaring global cost of judicial proceedings, more and more businesses are opting for a varied range of dispute resolution strategies. As a cost effective, expeditious approach and fastest growing dispute resolution mechanisms in the world guaranteed by law, arbitration has become a popular dispute resolution alternative for conflicting parties. Arbitration is highly compatible with the fast pace trend of the modern day business world with its quick and economical qualities, it is the smart choice to solving a wide range of commercial disputes.

Why Arbitrate

Arbitration involves the parties’ express agreement to have any dispute resolved by an agreed-upon third person or institution. When a business finds itself in the midst of a conflict, the logical answer would usually be to find the quickest and cheapest way out. Hence, pursuing the litigation route in this respect, may not always be a wise decision, as in most cases this will entail a longwinded process of countless court appearances and the drafting of endless legal documents. This tempestuous scenario, which has the added danger of further friction erupting between the parties, can easily be avoided through means of arbitration which is the most widely used Alternative Dispute Resolution (ADR) technique. Arbitration awards are binding. Once the final award is rendered, the procedure is complete and parties are obliged to comply.


Arbitration proceedings are neutral. In litigation, parties are confronted by a lack of choice and most of the time, are forced to use the national courts at hand to settle their disputes. Furthermore, due to the absence of a truly international court for the resolution of transnational commercial disputes, cases are usually instituted in the courts of the state where either the claimant or the defendant resides. On the other hand, arbitration offers the possibility of a completely neutral panel of adjudicators. This, in turn, eliminates the possibility of actual or perceived bias on the part of the court.


Parties in commercial disputes cannot afford to wait; they will need to resolve their disputes in the fastest manner they find suitable. In arbitration, parties can control the process. Results can be produced within a time frame that has been set by the parties themselves.


Arbitration guarantees privacy to the extent parties wish it to be. Parties can avoid public exposure of sensitive business and financial information and negative publicity often associated with litigation. This implies that the parties are able to then continue to have a relationship - even a working business relationship - after the dispute has been resolved.

Specialized Competenc of Arbitrators:

Arbitration ensures quality. In judicial procedures, judges may not have any special expertise about the matters in dispute; hence there is a further need to appoint an expert on the matter. Arbitration can avoid this need, by ensuring that the arbitrators chosen are experienced professionals in their line of work.


One of the main advantages of arbitration over litigation is cost and time savings. Savings of 20 to 50 percent in legal fees over litigation have been reported for arbitration.

SAARC Arbitration Council:

The First Meeting of the Inter-Governmental Expert Group (IGEG) on Investment, Arbitration and Avoidance of Double Taxation was held in New Delhi on 22-23 March 2004. The Meeting formed two Sub-Groups, one on Investment and Arbitration and the other on Avoidance of Double Taxation. The Sub-Group on Investment and Arbitration finalized the text of the SAARC Agreement for Establishment of SAARC Arbitration Council which was subsequently signed during the Thirteenth SAARC Summit held in Dhaka on 12-13 November 2005. The Agreement for Establishment of SAARC Arbitration Council entered into force on 2 July 2007. The First Meeting of the Governing Board of SAARC Arbitration Council was held at the SAARC Secretariat, Kathmandu on 7-8 January 2009. The appointment of Syed Sultan Ahmed as the first Director General of SAARC Arbitration Council was approved by the Thirty-second Session of SAARC Council of Ministers (Thimphu, 27 April 2010).