What is Domestic Arbitration

Domestic Arbitration is a form of Alternative Dispute Resolution

Domestic Arbitration is a form of Alternative Dispute Resolution (ADR) where one or more person(s) are appointed to arbitrate upon a dispute that takes place within one specfic jurisdictional Country.

Definition of Domestic Arbitration

Arbitration and Conciliation (Amendment) Bill 2003, the definition of the term domestic arbitration was given as:
‘Domestic Arbitration’ means an arbitration relating to a dispute arising out of legal relationship whether contractual or not, where none of the parties is:
i) An in individual who is a nationality of , or habitually resident in, any country other than India; or
ii) A body corporate which is incorporated in any country other than India; or
iii) An association or a body of individuals whose central management and control is exercised in any country other than India; or
iv) The Government of a foreign country.

How to find whether an Arbitration is Domestic or International

In order to test as to whether an Arbitration is Domestic or International one need to check-
1) If the arbitration takes place in India
2) If the subject matter of contract is in India
3) If the merits of the dispute are governed by the Indian Law
4) Whether the procedure of arbitration is also governed by the Indian Law

In other words a Domestic arbitration is one concerned with purely national or domestic issues. Meaning thereby that all aspects of the arbitration proceedings are related to a single jurisdiction. 

Salient advantages of Domestic Arbitration includes

Choice of Decision Maker – As compared to litigation, where one cannot "choose the judge", arbitration allows the parties to choose their own tribunal. This is especially useful when the subject matter of the dispute is highly technical: arbitrators with an appropriate degree of expertise (for example, quantity surveying expertise, in the case of a construction dispute, or expertise in commercial property law, in the case of a real estate dispute) can be chosen. For example, parties can choose a technical person as arbitrator if the dispute is of a technical nature so that the evidence will be more readily understood.

Efficiency – Arbitration is often faster than litigation in court. Arbitration can usually be heard sooner than it takes for court proceedings to be heard. As well, the arbitration hearing should be shorter in length, and the preparation work less demanding.

Privacy – Arbitral proceedings and an arbitral award are generally non-public, and can be made confidential. Arbitration hearings are confidential, private meetings in which the media and members of the public are not able to attend. As well, final decisions are not published, nor are they directly accessible. This is particularly useful to the employer who does not want his ‘dirty laundry’ being aired.

Convenience – Hearings are arranged at times and places to suit the parties, arbitrators and witnesses.

Flexibility – The procedures can be segmented, streamlined or simplified, according to the circumstances.

Finality – In most legal systems there are very limited avenues for appeal of an arbitral award, which is sometimes an advantage because it limits the duration of the dispute and any associated liability. There is in general, no right of appeal in arbitration except statutory Objections under Section 34 of Arbitration and Conciliation Act, 1996. 

Language - In arbitral proceedings the language of arbitration may be chosen, whereas in judicial proceedings the official language of the country of the competent court will be automatically applied.

Execution of decision - Because of the provisions of the New York Convention 1958, arbitration awards are generally easier to enforce in other nations than court verdicts.