Statutory Arbitration

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The process of arbitration can begin with a written agreement signed by both parties, or when legislation expressly states that arbitration can be used to resolve specific disputes. Statutory arbitration is defined as arbitration that is mandated by the legislation of Parliament or a state legislature.

Normally, arbitration is maintainable only when there is an arbitration agreement between the parties. But the government by a statute can empower certain categories of people to invoke arbitration, even though there is no arbitration clause between the parties. These types of arbitrations are known as statutory arbitrations.

This type of arbitration is mandated by legislation. When the subject matter of the dispute is governed by legislation and if there is any provision for resolving such dispute through arbitration, then the parties to the dispute have to first approach arbitration and then litigation for resolving their disputes. The arbitral tribunal for adjudicating such disputes is predetermined by law, and they have sole jurisdiction to rule on these disputes.