The Arbitrator in respect of escalation cost __________a)has no jurisdiction to proceed inherentlyb)has to proceed only within scope of Contract Actc)has to proceed only within scope ofd)has jurisdiction to proceed inherentlyCorrect answer is option 'D'. Can you explain this answer?

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Humanities/Arts Exam > Humanities/Arts Questions > The Arbitrator in respect of escalation cost ...

The Arbitrator in respect of escalation cost __________

a)
has no jurisdiction to proceed inherently
b)
has to proceed only within scope of Contract Act
c)
has to proceed only within scope of
d)
has jurisdiction to proceed inherently

Correct answer is option 'D'. Can you explain this answer?

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The Arbitrator in respect of escalation cost __________a)has no jurisd...

Cost escalation is an increase or decrease in the cost of an product, service or commodity over time. Cost escalation is specific to a particular type of cost as opposed to the economy as a whole. In case if escalation cost is subject matter of the arbitration, the arbitrator has jurisdiction to proceed inherently.

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The Arbitrator in respect of escalation cost __________a)has no jurisd...

Understanding the Role of the Arbitrator in Escalation Costs
The correct answer is that the arbitrator "has jurisdiction to proceed inherently." This means that the arbitrator has the authority and discretion to address escalation costs based on the contractual obligations and the circumstances surrounding the dispute.
Key Points
- Inherent Jurisdiction
- Arbitrators possess the ability to make decisions based on the terms of the contract and applicable laws.
- This authority allows them to interpret the contract's provisions regarding cost escalations.
- Scope of Contractual Authority
- The arbitrator's jurisdiction is derived from the contract itself.
- They can interpret clauses related to pricing, cost adjustments, and escalation, ensuring that all parties adhere to agreed-upon terms.
- Flexibility in Decision-Making
- An arbitrator's inherent jurisdiction provides flexibility to address unique circumstances that may arise during the execution of the contract.
- They can consider evidence and arguments presented by both parties, leading to a fair resolution.
- Limitations of Jurisdiction
- Although arbitrators have inherent jurisdiction, they must still operate within the framework of the contract and applicable laws.
- They cannot exceed their authority or make decisions that are outside the scope defined by the contractual agreement.
Conclusion
In summary, the arbitrator's inherent jurisdiction to proceed with matters related to escalation costs emphasizes their critical role in dispute resolution. By relying on the contract's terms and their interpretative powers, arbitrators ensure that disputes are resolved fairly and justly, reflecting the intentions of the contracting parties.

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The Arbitrator in respect of escalation cost __________a)has no jurisdiction to proceed inherentlyb)has to proceed only within scope of Contract Actc)has to proceed only within scope ofd)has jurisdiction to proceed inherentlyCorrect answer is option 'D'. Can you explain this answer?

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