The Arbitration Act 2017 (“the Act”) stands as a cornerstone of Pakistan’s legal framework, aiming to streamline dispute resolution through arbitration. This Act replaced the outdated Arbitration Act 1940, introducing significant changes to make arbitration a more efficient and attractive option for businesses and individuals alike.
Key Features of the Arbitration Act 2017
The Act brought about a wave of reforms aimed at promoting arbitration, including:
- Enhanced Party Autonomy: The Act allows parties significant freedom in shaping the arbitral process. They can choose arbitrators based on their expertise, determine the applicable law and procedure, and even agree on the seat of arbitration outside Pakistan.
- Streamlined Process: The Act sets out clear timelines for various stages of the arbitration process, aiming to reduce delays and ensure a swift resolution.
- Limited Court Intervention: One of the key objectives of the Act is to minimize court intervention in arbitral proceedings. Courts are encouraged to adopt a pro-arbitration stance and refrain from interfering unnecessarily.
- Enforcement of Awards: The Act strengthens the framework for enforcing arbitral awards. It makes it easier for successful parties to obtain court orders to enforce the award, both domestically and internationally.
Signing an arbitration agreement
Advantages of Arbitration under the 2017 Act
The Arbitration Act 2017 offers several advantages for parties seeking to resolve disputes:
- Flexibility and Control: Parties can tailor the arbitral process to their specific needs and circumstances, providing more control than traditional court proceedings.
- Confidentiality: Arbitration proceedings are generally private, protecting sensitive business information from public disclosure.
- Expertise: Parties can choose arbitrators with specialized knowledge in the relevant field, ensuring a more informed and technical decision-making process.
- Speed and Efficiency: The streamlined process under the Act aims to reduce delays and expedite the resolution process compared to traditional litigation.
Scope of Application and Exclusions
The Act applies to both domestic and international arbitrations seated in Pakistan. However, certain disputes are excluded from its purview, including:
- Matters relating to family law
- Disputes concerning the validity of wills or trusts
- Cases involving criminal offenses
Arbitration hearing underway
Common Questions about the Arbitration Act 2017
What is the role of the court under the Arbitration Act 2017?
The Act limits the role of the court in arbitration. Courts are encouraged to support the arbitration process and intervene only when necessary, such as for the appointment of arbitrators or enforcement of awards.
What are the qualifications required to be an arbitrator in Pakistan?
The Act does not prescribe specific qualifications for arbitrators. However, parties usually prefer arbitrators with relevant expertise and experience in the subject matter of the dispute.
Can a foreign party choose to arbitrate in Pakistan under the Act?
Yes, the Act allows foreign parties to choose Pakistan as the seat of arbitration. This promotes Pakistan as a hub for international arbitration.
How are arbitral awards enforced in Pakistan?
Arbitral awards are enforced under the same rules as court judgments in Pakistan. The successful party can apply to the court to execute the award.
Conclusion
The Arbitration Act 2017 marks a significant step forward in promoting arbitration as a preferred method for dispute resolution in Pakistan. The Act’s focus on party autonomy, efficiency, and limited court intervention offers a compelling alternative to traditional litigation.
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