The Concept of Forced Arbitration : An Arbitration with Wrong Footing

In modern times, alternative dispute resolution (“ADR") mechanisms including arbitration have evolved as viable means of resolving commercial and investment related disputes, both within local and international jurisdictions. The popularity and more pronounced acceptance of arbitration over other ADR mechanisms can be traced to its nature as a voluntary agreement, by parties to a main contract, to refer any dispute arising out of or in connection with a contract to arbitration. However, the key consideration of voluntariness which characterizes arbitration agreements have been subjected to varying attitudes especially in the light of what is known as the concept of “forced arbitration”.“Forced arbitration” means a situation where parties to a dispute have been mandatorily referred to arbitration by a contract (especially one in which the parties have unequal bargaining powers or the arbitration clause was inconspicuously included), by a statute or by any other means other than by the voluntary agreement of the parties to the dispute.Forced arbitration could arise either as an inclusion in a contract (especially contracts where the parties have unequal bargaining powers) or as a mandate of statute. Parties are known to use forced arbitration clauses in order to impose procedural challenges on the parties with the weaker bargaining powers. Given that parties have freedom to enter into contracts and are bound by the terms of such contacts, most contracts are enforced by the courts with the inclusion of the forced arbitration clauses.However, in recent times, the courts have begun to invalidate forced arbitration clauses on the ground of unconscionability