Law > Civil Laws > Alternate Dispute Resolution >Comparative Study of Arbitration and Adjudication
Arbitration is a procedure in which a dispute is submitted, by agreement of the parties, to one or more arbitrators who make a binding decision on the dispute. While adjudication refers to the legal process of resolving a dispute or deciding a case. During adjudication, courts identify the rights of the parties at that particular moment by analyzing what were, in law, the rights and wrongs of their actions when they occurred.In this article, we shall do a comparative study of arbitration and adjudication.
Distinction Betwen Arbitration and Adjudication
| Arbitration | Adjudication |
| Arbitration is an ADR procedure in which a dispute is submitted, by agreement of the parties, to one or more arbitrators who make a binding decision on the dispute | In adjudication, when a person violates the rights of another the person injured approaches the court. |
| The main object of arbitration is to settle disputes between two or more parties. | The main object of adjudication is to protect the natural rights of a person. |
| Generally, arbitration occurs in civil cases and particularly involving the commercial transaction. | Adjudication may be civil or criminal |
| It is a voluntary process | It is a compulsory process |
| The parties themselves appoint the sole arbitrator, as per their agreement. | In adjudication appointment of a judge is not done by the parties. They have to follow the procedure. |
| The presiding officer of the process is called an arbitrator | The presiding officer of the process is Judge or Magistrate or any other appointed official |
| The arbitral tribunal follows natural laws of justice and does not follow the process of laws. i.e. the Evidence Act, the Civil Procedure Code, etc. are not followed. | The adjudication follows all procedural and adjective laws like the Evidence Act, the Civil Procedure Code, the Criminal Procedure Code, etc. |
| Arbitration is a speedy, flexible, less expensive process. | Adjudication is a time-consuming, strictly procedural, and lengthy process. |
| The arbitrator may not have legal knowledge but he is an expert in the trade or the subject matter of the dispute. | The presiding officer during adjudication has the legal knowledge and may not be knowledgeable about the trade or the subject matter of the dispute. |
| In arbitration, importance is given to the question of facts than to the question of law. | In adjudication, equal importance is given to the question of facts and the question of law. |
| If both the parties agree, the arbitrator can pass interim orders. | Whether parties agree or not, if the court satisfies itself with the evidence submitted before it, then it can pass interim orders. |
| The parties have to pay arbitration costs inclusive of fees of the arbitration and administrative expenses. These expenses are paid directly by the parties. | In adjudication, the parties do not pay costs, expenses, and fees to the judge. However, they have to fee necessary Court Fees and Stamp duties. Judges and their staff receive salaries from the State. The administrative expenses are borne by the state. |
| If parties fail to pay requisite fees to the arbitrator, then the arbitrator has the power of ‘lien’ on the award. | In adjudication, there is no such type of lien. |
| The final decision of arbitration is called an award. | The final decision of adjudication is called judgment, decree, order, etc. |
| Parties may or may not get assistance from legal practitioners. | Most of the adjudication process requires assistance from legal practitioners. |
| Arbitration is an act of parties. | An adjudication is an act of law. |
| Besides arbitration, the arbitrator may also use processes like mediation, conciliation, negotiation, and settlement. | The courts themselves are not involved in the processes like mediation, conciliation, negotiation, and settlement. |
Conclusion:
Arbitration is a speedy, less expensive, and flexible process. While adjudication is time-consuming, expensive (due to assistance by legal professionals), and a strictly procedural process. The arbitrator may not have legal knowledge but he is an expert in the trade or the subject matter of the dispute. The presiding officer during adjudication has the legal knowledge and may not be knowledgeable about the trade or the subject matter of the dispute. Hence Arbitration is preferred over adjudication in case of disputes involving commercial or technical transaction.
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