Legal Environment in

Business
Junayed Mohammed Hashib (JMH)
Lecturer
American International University Bangladesh
Copyright 2015 by JMH

Introduction
Definition: Arbitration is an alternative to
legal action in the courts, in order to settle
an unresolved dispute.
Explanation: It is legal. It is popular .It is
easier than a judicial process
Terminologies:
Arbitrator : The person appointed with
agreement from the parties.
Arbitral tribunal: A group of arbitrators.
Award : The final decision of the arbitrator.

Elements of Valid Arbitration

Agreement
Legal Contract
The parties must be capable of entering into a legally
binding contract,
Written Agreement
The agreement, whenever possible, should be in writing.
Signed
It must be signed by the parties concerned.
Matters Clearly Stated
It must state clearly those matters which will be
submitted to arbitration.
No Illegal Content
It must not contain anything that is illegal.

Selecting Arbitrator

Criteria for selecting an Arbitrator

Mutual Consultation
Arbitration can only take place if both the parties have
agreed to it. Both the parties have mutually consult each
other and agree on selecting an arbitrator(S). Unlike in
judicial courts.
Neutral
The arbitrator should be a neutral person. Independent
from the parties. And should be biased towards one party
or individual.
Qualified & Experienced
The arbitrator should be sufficiently qualified and
experienced in the matter of dispute. He/She might not be
having enough knowledge about the judicial matters

Advantages &
Disadvantages
Advantages

Less expensive
Faster than action at law
Generally private.
No bad publicity.
Confidential!
Very flexible
Arbitrator is knowledgeable in the matter of dispute.
Judges are not.
Disadvantages
In case of arbitral tribunal, the process can be slow
Arbitrator may overlook the opinion of court

The Award
Criteria for the validity of award
It must be within the prescribed time set by the
parties.
it must be legal and enforceable at law.
It must cover all the matters of dispute brought
forward,
It must be the final verdict, that is it should settle all
disputes.
It must be clear and not ambiguous. It must address
only the matters of disputes put forth in the
proceedings and not anything else,
It should be in writing

Conclusion

Arbitration is a legal technique for the

resolution of dispute outside the courts. The
parties refer the dispute to a neutral,
knowledgeable person (arbitrator or arbitral
tribunal) who then gives the final decision
(award) to which both the parties agree.