International Journal of Law and Legal Jurisprudence Studies

Scope and Jurisdiction of Indian Courts In International Commercial Arbitration-Dr. Monika Jain, Assistant Professor, Amity Law School, Delhi

Abstract

Arbitration is a mechanism which provides an effective and relevant dispute resolution system before the Court proceedings time consuming and cost based in resolving disputes between the parties. We examine the Parties voluntary submission to Arbitration, a fast resolution and disposal of the disputes between the parties and short peer review about all process of arbitration, the confidence of Foreign Investors to invest in India and recreation international investors the Indian legal system to provide an speedy, cheaper and flexible dispute resolution system. International commercial arbitration related to India as well as outside India. This research paper held about Companies, Industries, export-import corporations, houses and others covered the jurisdiction. International commercial arbitration preferred as a method of dispute resolution its autonomous character. Arbitration provides the parties with the opportunity to choose the arbitrators. The 1996 Act empowers parties to resolve disputes without the courts, the preferred mode of dispute resolution in most commercial transactions in global. We discuss Arbitration and conciliation Act, 1996 to minimize the judicial process in arbitration the Courts can grant interim reliefs under section 9 for the protection of parties who are awaiting arbitration allows such parties to choose applicable laws, the arbitral procedure, the venue, the language etc, domestic arbitration; international commercial arbitration; enforcement of foreign award and conciliation based on the UNCITRAL Conciliation Rules of 1980. Some basic pillars LCIA, ICC are the most basic Arbitration organizations.

Key Words: Arbitration, dispute resolution system, International, Commercial arbitration, conciliation, foreign, judgment.

 

Great progress was made when arbitration treaties were concluded in which the contracting powers pledge in advance to submit all conflicts to an arbitration court, treaties which not only specify the composition of the court, but also its procedure. 

                                                                                                                               Ludwig Quidde[1]

If one party resolves to demand what the other resolves to refuse, the dispute can the determined only by arbitration and between powers, who have no common superior, there is no common arbitrator than the sword.

                                       Samuel Johnson quotes, (English poet, critic and writer 1709-1784)[2]

Introduction

 The roles of international trade in the economic development of nations increase in the number of commercial disputes. In India globalization, privatization, liberalization of the economy and increase in competition an increase in commercial disputes, industrial growth, modernization and improvement of socio-economic factors which related to the growth on dispute resolution mechanisms. In India development has increased number of cases, slow procedure, overburden of court delay justice alternative dispute resolution mechanisms, including arbitration, and have become more crucial for businesses operating in India. Commercial transactions by the growth of the Indian economy have resulted in of commercial disputes, arbitration. The present arbitration system in India is not sufficient, and the quality of arbitration has not quick and cost-effective mechanism for resolution of commercial disputes.

International commercial arbitration refers to a consensual means of dispute resolution by non-governmental decision makers that produces a definitive and binding award which is capable of enforcement through national courts.[3] It may also be defined as ‘the process by which a dispute or difference between two or more parties as to their mutual legal rights and liabilities is referred to and determined judicially and with binding effect by the application of law by one or more persons.’[4]

 When international disputes involving parties from two or more different nations arise, it often presents an important question as to which nation would have the jurisdiction to decide the dispute. In order to avoid the perils of being adjudicated by a foreign system of law and a foreign court, international commercial arbitration emerged as a preferred solution. It thus transcends national frontiers in scope, content and nature.[5]

 International commercial arbitration preferred as a method of dispute resolution its autonomous character. Arbitration provides the parties with the opportunity to choose the arbitrators. The dispute resolution process to suit the needs of parties to makes arbitration and method of dispute resolution.

                                         Arbitration in India: An Overview

Arbitration history in India has long story. In ancient times, tradition people voluntarily initiative

by a group of five men of a community or village called the panchayat for a dispute resolution at local level. In British rule, the Bengal Regulations in 1772 famous for modern arbitration base in India, provided for reference by a court to arbitration, with the consent of the parties, accounts, partnership deeds, and breach of contract etc. Arbitration and Conciliation Act, 1996, the law governing arbitration in India consisted mainly of three statutes:

(i)              the 1937 Arbitration (Protocol and Convention) Act,

(ii)             the 1940 Indian Arbitration Act, and

(iii)           The 1961 Foreign Awards (Recognition and Enforcement) Act.

 The Indian law of arbitration is context in the Arbitration and Conciliation Act 1996 (Act).1 The Act is based on the 1985 UNCITRAL Model Law on International Commercial Arbitration and the UNCITRAL Arbitration Rules 1976. The Statement of Objects and Reasons of the Act recognizes that India’s economic reforms will become effective only if the nation’s dispute resolution provisions are in tune with international regime. The Statement of Objects and Reasons set forth the main objectives of the Act as follows:

 i) To comprehensively cover international and commercial arbitration and conciliation as also domestic arbitration and conciliation;

ii) To make provision for an arbitral procedure this is fair, efficient and capable of meeting the needs of the specific arbitration;

iii) To provide that the arbitral tribunal gives reasons for its arbitral award;

iv)To ensure that the arbitral tribunal remains within the limits of its jurisdiction;

v) To minimize the supervisory role of courts in the arbitral process;

vi) to permit an arbitral tribunal to use mediation, conciliation or other procedures during the arbitral proceedings to encourage settlement of disputes;

vii) To provide that every final arbitral award is enforced in the same manner as if it were a decree of the court;

viii) to provide that a settlement agreement reached by the parties as a result of conciliation proceedings will have the same status and effect as an arbitral award on agreed terms on the substance of the dispute rendered by an arbitral tribunal; and

 ix) to provide that, for purposes of enforcement of foreign awards, every arbitral award made in a country to which one of the two International Conventions relating to foreign arbitral awards to which India is a party applies, will be treated as a foreign award.” [6]

                    International Commercial Arbitration – An Indian Perspective

 Increasing of foreign capital, to attract foreign direct investments (FDI) serious impact to FDI, India bureaucracy, inherited from the British era; the lack of an efficient dispute resolution system in the India. In 1991 the Indian economy like globalization, liberalization and privatization has enabled the country’s economy to break low growth rate and grow at rates as high as 8% per annum, policy changes, and stronger economy of India as a market for foreign investment.  Indian Courts are famous slow proceedings and time consuming. The Indian Arbitration and Conciliation Act 1996 introduced solution to the Indian judicial system model on the UNCITRAL Model Law of Arbitration.

The 1996 Act empowers parties to resolve disputes without the courts, the preferred mode of dispute resolution in most commercial transactions in global. The 1996 Act to minimize the judicial process in arbitration the Courts can grant interim reliefs under section 9 for the protection of parties who are awaiting arbitration allows such parties to choose applicable laws, the arbitral procedure, the venue, the language etc, domestic arbitration; international commercial arbitration; enforcement of foreign award and conciliation based on the UNCITRAL Conciliation Rules of 1980. The act is divided into three parts:

  • Part I relates to arbitration and applies where the seat of arbitration is India;
  • Part II relates to the enforcement of certain foreign awards; and
  • Part III deals with conciliation.
  • Part IV relationship between arbitration and commercial growth.
  • Part V recommendations for improving arbitration practice in India.

Part I include several provisions that allow for interference by Indian courts in the arbitration process, such as:

  • passing interim orders before, during or after the start of arbitration (Section 9);
  • the appointment of arbitrators (Section 11);
  • terminating the mandate of arbitrators (Section 14(2));
  • court assistance in taking evidence (Section 27);
  • setting aside an arbitral award (Section 34); and
  • Reference of a dispute to arbitration in insolvency proceedings (Section 41).

Sections 9, 11 and 34, among others, have gained a reputation for being readily available to parties attempting to stall arbitration proceedings and delay the enforcement of arbitral awards[7].

The Arbitration and Conciliation Act 1996 interpretation by the courts, in both past and recent judgments.


The courts in India first considered the applicability of Part I of the act to arbitration taking place outside India in Bhatia International v Bulk Trading. [8]The Supreme Court held that Part I would apply to all arbitrations and to all proceedings relating thereto, where such arbitration is held in India. For international commercial arbitration, it was held that Part I would still apply unless the parties by agreement, whether express or implied, had excluded all or any of the provisions included therein.

The Supreme Court subsequently reiterated its decision in Bhatia International in Venture Global Engineering v Satyam Computers Services.[9] This case dealt with an arbitration award made in England through an arbitral process conducted by the London Court of International Arbitration. The Supreme Court held that Part I would apply to such an arbitral award. Consequently, the courts in India would have jurisdiction under both Section 9 and Section 34 of the act. Hence, an Indian court could entertain a challenge to the validity of such an arbitral award.

Since the judgments in Bhatia International and Venture Global, the Indian courts have had to apply the rationale detailed therein in various other cases. However, it increasingly became accepted that the judgment in Bhatia International was interventionist in nature and not aligned with the spirit of party autonomy that is core to the arbitral process.

In September 2012 in Bharat Aluminium Company (BALCO) v Kaiser Aluminium Technical Services Inc[10] the Supreme Court reconsidered its earlier controversial ruling in Bhatia International concerning applicability of Part I to arbitrations that are held outside India. The court held that the rationale laid down in Bhatia International, and followed in Venture Global, was not in line with the act. Accordingly, it overruled these earlier judgments and held that Part I would not apply to arbitrations held outside India.

The Supreme Court stated that Part I applies to only those arbitrations that are held within India – the crucial test for determining whether Part I is applicable is whether the seat of arbitration is in India. Accordingly, it was held that Indian courts will have no jurisdiction to make Part I of the act applicable to an arbitral award made outside India. The Supreme Court rejected the argument that the courts of the country that is the seat of arbitration and those of the country whose law is chosen by the parties will have concurrent jurisdiction over any court proceedings in relation to such arbitral process. It was held that the courts of only the country in which the seat of arbitration is located have jurisdiction to entertain any matter relating to the arbitration. Only in the absence of a choice of seat of arbitration will the country whose law is chosen by the parties have jurisdiction to entertain arbitration proceedings.

It was also clarified that since Part I of the act does not apply to arbitrations held outside India, provisions such as those for interim relief under Section 9 would also not apply to arbitrations held outside India. Consequently, if the seat of arbitration is located outside India, the parties would not be free to institute civil suits in India for obtaining interim relief. The argument that in such a scenario the parties would be left without a remedy for interim measures was rejected by the Supreme Court, as the parties were free to seek appropriate remedies in their chosen jurisdiction.

 BALCO the Supreme Court clarified that the decision would apply only prospectively to arbitration agreements – all proceedings arising from arbitration agreements dated before 6 September 2012 would therefore be subject to the law as it stood before the judgment. However, a recent judgment of the Bombay High Court in Konkola Copper Mines v Stewarts & Lloyds of India,[11] while discussing the prospective application of the rationale in BALCO, observed that the Supreme Court had made observations on various aspects of arbitration law in India. Accordingly, it would not be proper to hold that the reasons contained in the Supreme Court judgment would only operate prospectively.

The Bombay High Court further observed that the Supreme Court judgment was declaratory with regard to various established propositions of law. Even if there were judgments before BALCO that had held that the place of arbitration would not be relevant for determining the jurisdiction of a court, the same did not lay down the correct position of law and hence could not be relied on. The Bombay High Court judgment is significant, since it makes it clear that the reasoning adopted by the Supreme Court in BALCO would not apply only prospectively, but would also apply to disputes arising from arbitration agreements entered into before September 6 2012.

Lal Mahal decisionIn addition to restricting the scope of judicial interference in arbitrations awards passed outside India, the Indian courts have also ensured that even at the enforcement stage of such foreign awards in India, the grounds for setting aside an award are fairly limited.

A recent Supreme Court judgment in Shri Lal Mahal Ltd v Progetto Granpo Spa[12] overruled an earlier judgment in Phulchand Exports Limited v OOO Patriot[13] to hold that the expression ‘public policy of India’, when used in the context of Section 48(2)(b) of the act (which sets out the grounds on which the enforcement of foreign awards may be refused), cannot be given a wider meaning to include patent illegality in an arbitral award, as is done in context of the same expression used in Section 34 of the act relating to enforcement of domestic awards. Therefore, the scope for challenging a foreign award with respect to a domestic award has been restricted.

Renusagar Power Plant Co Ltd v General Electric Co,[14] while construing the term ‘public policy’, the Supreme Court applied the principles of private international law and held that an award would be contrary to public policy if its enforcement went against:

  • fundamental policies of Indian law;
  • the interests of India; or
  • Justice or morality.

It was also held in the judgment that an award cannot be set aside on its merits.

However, the expression ‘public policy’ became a cause of concern when it was interpreted by the Supreme Court in ONGC v SAW Pipes Ltd.[15] the court’s judgment in this case expanded the concept to add that the award would be contrary to public policy if it was patently illegal. The Supreme Court distinguished between Saw Pipes and Renusagar on the grounds that the latter was in the context of a foreign award, while the rationale of the former was confined to domestic awards only.

Thereafter, in Phulchand Exports the Supreme Court held that the meaning given in Saw Pipes to the expression ‘public policy of India’ in Section 34 of the act (concerning domestic awards) must be applied to the same expression occurring in Section 48(2)(b) of the act (concerning foreign awards). Therefore, if a foreign arbitral award was patently illegal, it would be deemed to be against public policy and therefore serve as a ground on which an Indian court could refuse to enforce the award.

In Lal Mahal the Supreme Court analysed the earlier law and held that the enforcement of a foreign award would be refused on the ground that it is contrary to public policy of India only if it is covered by one of the three categories enumerated in Renusagar. Although the same expression (ie, ‘public policy of India’) is used in the context of challenging both a domestic award (Section 34(2)(b)(ii)) and a foreign award (Section 48(2)(b)), and the concept of the term is the same in nature in both sections, its application would differ in degree. The term’s application for the purposes of Section 48(2)(b) is more limited than its application in respect of Section 34(2)(b)(ii).

The court further affirmed that Section 48 of the act does not give the court and opportunity to have a second look at a foreign award at the enforcement stage; neither does the scope of inquiry under Section 48 permit review of foreign award on its merits. Procedural defects  taking into consideration inadmissible evidence, or ignoring or rejecting evidence that may be of binding nature in the course of foreign arbitration will not necessarily lead the court to refuse enforcement of an arbitral award on the ground of public policy.

Therefore, the Supreme Court affirmed that while considering the enforceability of foreign awards, the court did not exercise appellate jurisdiction over the foreign arbitral award; nor could it enquire as to whether, while rendering the foreign award, an error was committed.

                                           Comment by Supreme Court

The observations regarding the scope of interference in awards is in line with previous decisions of the Supreme Court, where it has been clearly held that the courts will not sit in appeal over the arbitral award and reappraise the evidence adduced by the parties, unless the parties can show an error apparent in the facts of the arbitral award and/or any legal misconduct on the part of the arbitrator. Thus, the reasonability of the reasons of the arbitral award made by the arbitrator cannot be looked into or appreciated by the courts in any manner whatsoever.[16]

The recent judgments of the Indian courts have been well received in the sphere of international commercial arbitration, which has largely viewed the process of pursuing arbitration proceedings and getting foreign awards enforced in India as a time-consuming process with possibilities of judicial interference at various stages. These recent pronouncements by the Indian courts will result in faster resolution of disputes through arbitral processes, as the avenues and grounds to challenge a foreign award have been restricted. It is hoped that this will revive the confidence of the international community in commercial arbitration as being a credible and fast means of dispute resolution in InTop of Form

                                          International Arbitration in India 

  • Ad hoc arbitration in India: The parties may chose to refer the disputes to arbitration under the 1996 Act, independent of any institutional rules. Arbitrations arranged by parties themselves, without recourse to an arbitral institution, are referred to as ad hoc arbitrations[17]. In India, ad hoc arbitrations use retired judges of High Courts and The Supreme Court of India to act as arbitrators, the efficiency of these arbitrations is low. The retired judges who act as arbitrators are seventies and it difficult to work at high levels. The judges are comfortable arbitrations in the courts and take up to 3-5 years between the hearings, as arbitrators are booked, difficult to get continuous dates for hearings, to long years of training and service, the judges also influenced by procedural statutes like the Code of Civil Procedure and the Evidence Act, Torts, no strict applicability to arbitration proceedings.
  • Institutional Arbitrations: Institutional arbitration has been defined as arbitration conducted by an arbitral institution in accordance with prescribed rules of the institution. The Indian Council of Arbitration is the sole Indian body providing facilities for institutional commercial dispute resolution. The Rules of Arbitration of the Indian Council of Arbitration are very comprehensive, setting out matters without conflict; use wide supervisory powers and all communication between the parties and the arbitrators through the Council’s Registrar[18]. The Council is empowered to reject requests for arbitration without giving any reason, and can also determine any challenge to an arbitrator’s eligibility. Arbitration under the Council is low administrative costs and arbitrators’ fees payable, low costs and fees are limited in that the established and reputed arbitrators avoid participating in Arbitrations under the Council.
  • International Arbitration outside India InternationalArbitration outside India can be held either under the auspices of institutions likes the London Court of International Arbitration(LCIA)[19], the ICC International Court of Arbitration (ICC)[20], the American Arbitration Association(AAA)[21], the World Intellectual Property Organisation (WIPO)[22], the Stockholm Chamber of Commerce and the International Council for Settlement of Investment Disputes (ICSID)[23]. Arbitration outside of India can also be heard under an arbitral tribunal constituted under stand-alone procedures like the UNCITRAL Rules. The arbitration institutions provide procedural rules and fix arbitration costs according to the scales, arrange for various support services required for the arbitration, including video and teleconferencing, translations and transcripts of proceedings.

Arbitral institutes like the LCIA, ICC and AAA’s popularity is largely restricted to the US, attracting little interest for arbitration from Asian or European parties. Arbitration under the AAA is compliance with a detailed discovery process, which can take up to 6-8 months.

  • London Court of International Arbitration: The LCIA is one of the first major international institutions established for commercial dispute resolution; it has developed a number of rules to increase the efficiency of arbitration proceedings. LCIA Rules is requires parties to waive the right of appeal before national courts and other judicial bodies, thereby ensuring the finality of the arbitration award. The features of the LCIA include:
  • Tribunal empowered to pass interim orders and interim reliefs, security for claims and costs.
  • ICC International Court of Arbitration:The present ICC Rules of Arbitration came into effect on 1 January 1998 and mark the first revision of the Rules in over 20 years, enhanced power of supervision the Court and entire arbitral process conduct of proceedings and adherence to rules of procedure, an arbitration agreement before commencement of proceedings, challenges to arbitrators, scrutinizing the final award in a court. Guidelines for the conduct of arbitration of small imposed the cost and claim. For example: Submit pleadings and petitions electronically; use a single arbitrator; limit the use of experts and; a cost-effective place.
  •  Deposits parties are not required to pay for the whole arbitration in advance.
  • Interest on deposits made to the LCIA is credited to respective party’s account.
  • Fast-track option for conduct of proceedings.
  • Delays and counteracting delaying avoids.
  • Confidentiality direct communication between the parties and arbitrators is encouraged of proceedings.
  • Strictly time-bound proceedings.
  • Expert arbitrators available to choose from, parties are free to select an arbitrator who is either in panel or not on the panel.
  • Institutional support for settlement of disputes during arbitral proceedings before final hearing.[24]

The other important features of Arbitration under the ICC Rules are:

  • Tribunal empowered to make interim awards to secure the interests of the parties.
  • Costs and fees to be determined as per the ICC Rules of Arbitration.
  • Small claims deals with separately to minimize costs.
  • Strictly time-bound proceedings.
  • Mandates Terms of Reference setting out all issues and facilitating agreement procedural aspects.
  • Time efficient
  • Institutional support for the settlement of disputes arbitral proceedings, but before a final hearing.[25]
  • Ad hoc Arbitration under UNCITRAL Rules:The parties can choose arbitrators known to lawyers and Arbitration on ad hoc basis under the UNCITRAL Rules, effective arbitration laws in various countries and the parties can agree upon of procedural matters based on preference the parties and their lawyers need to arrange the support services required for arbitrations, the costs involved arbitrations discretion of the arbitral tribunals.[26]

                                                      Comparative Analysis

Arbitration under the ICC or LCIA is more cases are claims around. The parties are engaging law firms in international arbitrations; they can also resolve their disputes by constituting an international ad hoc arbitral tribunal under UNCITRAL Rules. Law firms selecting suitable arbitrators, arranging for support services. The international institutions following advantages:

  • Efficient proceedings and receiving award within fixed time periods.
  • High quality and competence of arbitrators.
  • Award standing scrutiny in a court of law.
  • The award can be enforced in India without risk of challenge in Indian courts.
  • Increased settling the disputes through mediation.

 If developing countries parties choosing international arbitration to be very expensive, successful parties are able to recover the entire costs of the arbitration including the travelling expenses, legal fees, administrative expenses, etc., to be aware international arbitration increases the risk the entire costs.

Arbitrations in India are less professional and more time-consuming, more cost-effective than other countries. Arbitration in India is that the award made is a domestic award and can be challenged in Indian courts under Section 34 of the 1996 Act. Indian judges admitted challenges to Arbitration awards on any of the permissible grounds specified under the 1996 Act. The arbitration process is concluded, enforcement of the award is delayed by several years, and domestic arbitration unattractive alternative.[27]

                                                           Policy in India

 UNCITRAL Rules, the Arbitration and Conciliation Act, 1996 under Section 34 also states that an award can be set aside by a Court, include the dispute falling outside the arbitration agreement or procedural issues, arbitral tribunal or bias. Arbitration statutes related further situations where the arbitral award is in conflict public policy of India always been a ground of challenge the New York Convention.

The Supreme Court of India had interpreted this in a narrow manner. Indeed, it has settled law that awards would not be set aside even if the Court was of the view that the award had not interpreted Indian law correctly.[28]

 The Supreme Court of India, in a recent decision11, held that as far as domestic awards are concerned, any incorrect interpretation of Indian law would fall under this category and the Courts would be required to set aside domestic arbitration awards if there was a wrong interpretation of Indian law. In a contorted interpretation, it held that if the award was a foreign award and even though Indian law was the substantive law of the Arbitration, then a wrong interpretation of Indian law in a foreign award would not amount to a violation of the public policy of India. This is another strong reason why more and more foreign and Indian companies prefer International Arbitration to avoid challenges to the award.[29]

The award made by an arbitral tribunal outside India under the New York Convention is classified as a foreign award under the 1996 Act. Part II of the 1996 Act provides the enforcement of foreign awards. There are conflicts in judgments regarding whether the foreign award, to which Indian law is applicable, can be challenged under Section 34 of the 1996 Act. The Bombay High Court has held that foreign awards cannot be challenged under Section 34 of the 1996 Act[30]. On the other hand, the Gujarat High Court has taken a view that if foreign awards are made according to Indian laws then they can be challenged under Section 34 of the 1996 Act. However, the parties can, by mutual agreement, exclude the applicability of Part I of the 1996 Act and thereby avoid the mischief of Section 34.[31]

                                     Enforcement of Foreign Awards in India

Enforcement of the award is important, if not more than, a favorable award.  Arbitration awards less value unless it can be speedy and effectively enforced and another scene of enforceability of foreign awards in India.

The 1996 Act provides a summary mechanism for the enforcement of awards classified as foreign awards[32]. It must be noted that only awards made under the New York Convention of 1960[33] or the Geneva Convention of 1927[34] can be classified as foreign awards. However, in our experience the relevance of the Geneva Convention is extremely limited, while the more recent New York Convention has wider applicability. This paper, therefore, focuses on the provisions applicable to the enforcement of awards made under the New York Convention only.

A foreign award has been defined under the 1996 Act as an arbitral award on differences between persons arising out of legal relationships, whether contractual or not. Such an award must also be considered as commercial under the law in force in India, made on or after 11 October 1960. A foreign award can also be one

  • in pursuance of an agreement in writing for arbitration to which the Convention set forth in the First Schedule applies, or
  • in territories where the Central Government is satisfied that reciprocal provisions have been made public by notification in the official gazette[35].

Under Section 44, an arbitral award is a foreign award only if it is made in pursuance of an agreement to which the New York Convention applies, or if it is made in a territory to which the New York Convention applies. International commercial arbitration, on the other hand, applies only to agreements to which any other international or bilateral treaty would apply.[36]

The emphasis on location, in regard to foreign awards, relates to territory rather than country. The Supreme Court in this case has lain down that an award made in Ukraine after the dissolution of the USSR would be valid, even though Ukraine has not been separately notified as a reciprocating territory under the 1996 Act[37].

The Supreme Court of India has held that the party holding a foreign award can apply for enforcement of it. Before taking further steps, however, the court in charge of execution of the award has to proceed in accordance with sections 47 to 49[38]. The Party seeking enforcement of the foreign awards can enforce the same by filing only one proceeding in the court. The court in the first stage may have to decide about enforceability of the Award having regard to the requirement of the 1996 Act. Once the court decides that the foreign award is enforceable, it can take further effective steps for execution of the same. The Supreme Court has further held that it is clear from statement of object and reasons, and sections 47 to 49 of the Act that every final Arbitral award is to be enforced as if it were a decree of the Court[39].

 

 

                                                 Conclusion and Suggestions

In our experience of analyzing various international arbitrations studies, we have examined many difficulties due to improper drafting of the Arbitration Clause. We suggest that the Arbitration Clause should be drafted carefully. We are giving some useful suggestions, which one can take into consideration while drafting an Arbitration Clause for International Arbitration:

  • If Indian law is applicable for the arbitration, one should exclude the applicability of the Part I of Arbitration and Conciliation Act 1996.
  • Ensure that the Arbitration Clause stipulates that the New York Convention 1960 would be applicable to the arbitration and that the venue for arbitration is notified as a reciprocating territory.
  • Make the Arbitration Clause as comprehensive as possible to enable the Tribunal to settle all the disputes which may arise regarding the agreement.
  • Ensure the clause stipulates the institution under whose rules the arbitration would be held. If the Arbitration is ad hoc arbitration, then stipulate UNICITRAL rules to be applicable.
  • Expressly stipulate the manner in which the costs of arbitration are to be borne in the event the parties proceed to arbitration.

Government should work out more other incentives for resolution of disputes means of arbitration, recovery suit is filed in court deposit of court fees as percentage of claim amount, which can be avoided if arbitration is initiated. Government shall realize without failure that use of arbitration can help in reducing the burden of litigation on judiciary. The government should disseminate knowledge of the benefits of alternate dispute resolution mechanisms to foster growth of an international arbitration culture amongst lawyers, judges and national courts. Judiciary in India is under pendency of millions of cases in different courts due to which as a result Legal system has become subject of Position does not to be any way better in most of developing economies, commercial arbitration must be perceived and implemented in strategic way rather than as a routine litigation exercise, government machineries shall appropriately educate and train its business community about the commercial arbitration. The developed countries where the manner of settling disputes has substantially evolved separately across various industry sectors, there is no marked difference in arbitration practice from one industry to another in India. Due to the technical complexities and long term nature of relationships between parties in these industries, arbitration in construction and IT industry disputes are characterized by certain peculiarities quite distinct from other industries. There is no marked difference in the arbitration practice based upon the size of the industry, to amend the law which would give value to the law, corporate India to make intensive efforts in holding seminars, conferences and research endeavors in the field of commercial arbitration, Indian Business community over the time by making doing business free. We have educated and awareness of people through seminars, conference, talk show, conversation. I have also recommended the Indian government organized extensive training organized by FICCI, PHD Chamber of Commerce, Ministry of Corporate Affairs, industries; MNC Companies are positive sign to create for commercial arbitration. The government should reorganize the knowledge about dispute resolution in commercial arbitration in India.

[1]Ludwig Quidde,http://www.brainyquote.com/quotes/keywords/arbitration.html#8s5ICIMcjuUbQ4Fh.99

[2] Samuel Johnson quotes, (English poet, critic and writer 1709-1784)

[3] Cary B. Born, International Commercial Arbitration in the United States: Commentary and   Materials, 1 (The Netherlands: Kluwer law and Taxation Publishers, 1994).

[4] Halsbury’s Laws of England, 332 (Butterworths , 4thed., 1991).

[5] Redfern and Hunter, Law and Practice of International Commercial Arbitration, 13 (Sweet and Maxwell, 4thed., 2004)

[6] http://www.kaplegal.com/statutes/index.html

[7] The Arbitration and Conciliation Act 1996

[8] Bhatia International v Bulk Trading, (2002) 4 SCC 105.

[9] Global Engineering v Satyam Computers Services, 2008(1) SCALE 214.

[10] Bharat Aluminium Company (BALCO) v Kaiser Aluminium Technical Services Inc  (2012) 9 SCC 552.

[11] Konkola Copper Mines v Stewarts & Lloyds of India(4) Appeal (Lodging) 199/2013.

[12] Shri Lal Mahal Ltd v Progetto Granpo Spa (5) 2013(8) SCALE 489.

[13] Phulchand Exports Limited v OOO Patriot (6) 2011 10 SCC 300. Supreme Court restricts scope of public policy challenges to foreign awards“).

[14]Renusagar Power Plant Co Ltd v General Electric Co (7) AIR 1994 SC 860.

[15] ONGC v SAW Pipes Ltd (8) AIR 2003 SC 2629.

[16]  Goa Daman and Diu Housing Board v Ramakant VP Darvotkar ((1991) 4 SCC 293)andArosan Enterprises Ltd v Union of India ((1999) 9 SCC 499).

[17] Saraf, B.P., and Jhunjhunwala, S.M., Law of Arbitration and Conciliation, 2nd ed., Snow White Publications, 2000, p.38.

[18] Ibid.

[19]  London Court of International Arbitration (LCIA) is an independent body dedicated to for dispute resolution.

[20] The International Court of Arbitration for providing dispute resolution services.

[21] The American Arbitration Association is the leading American Institute providing services for dispute resolution.

[22]  The World Intellectual Property Organisation, Geneva (WIPO) has set up an Arbitration and Mediation Centre to assist in resolving disputes pertaining to Intellectual Property Rights.

[23]  The International Council for Settlement of Investment Disputes (ICSID) is a World Bank body that provides a dispute resolution forum for financial matters between nation states and nationals of other nation states

[24]London Court of International Arbitration (LCIA) is an independent body dedicated to for dispute resolution. Arbitration rules effective in 1 Jan 1998

[25] ICC Rules of Arbitration are used worldwide to resolve business disputes through arbitration. The current Rules are in force as from 1 January 2012.

[26]UNCITRAL Arbitration Rules (as revised in 2010) adopted in 2013

[27] Bachawat, R.S., Law of Arbitration and Conciliation, 3rd ed., Wadhwa and Co., 1999, pp.677 – 874.

[28]  Renusagar Power Co. Ltd. v. General Electric Co., 1994 Supp (1) SCC 644

[29]  ONGC v. Saw Pipes, (2003) 5 SCC 705.

[30] Jindal Drug v. Noy Vallesina (2002) 2 Mh.L.J. 820. See also (2003) 4 Mh.L.J. 329.

[31] Nirma Ltd. v. Lurgi Energie Und Entsorgung GmbH 2003 (2) Arb.LR. 241 (Guj).

[32] Part II, The Arbitration and Conciliation Act, 1996

[33] New York Convention of 1960

[34] Geneva Convention of 1927

[35] Section 44, The Arbitration and Conciliation Act, 1996.

[36] Ibid

[37] Section 44, The Arbitration and Conciliation Act, 1996.

[38] AIR 2001 SC 2293 at pg. 2303

[39] Ibid

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