Sem Notes

Mod 1: intro to int comm arb

Analyse the definition and meaning of the term International and

Commercial in International Commercial Arbitration
1. S2(f): "International commercial arbitration" means an arbitration relating to
disputes arising out of legal relationships, whether contractual or not, considered as
commercial under the law in force in India and where at least one of the parties is
- (i) an individual who is a national of, or habitually resident in, any country other
than India; or
- (ii) a body corporate which is incorporated in any country other than India; or
- (iii) an association or a body of individuals whose central management and
control is exercised in any country other than India; or
- (iv) the Government of a foreign country;

2. Meaning of International:
A. To address global legal disputes effectively and speedily, International Arbitration
helps parties to enter into an arbitration agreement and resolve their disputes
effectively.
3. UNCITRAL Model Law, 1985:
The term "commercial" should be given a wide interpretation so as
to cover matters arising from all relationships of a commercial nature,
whether contractual or not. Relationships of a commercial nature include,
but are not limited to, the following transactions: any trade transaction for
the supply or exchange of goods or services; distribution agreement;
commercial representation or agency; factoring; leasing; construction of
works; consulting; engineering; licensing; investment; financing; banking;
insurance; exploitation agreement or concession; joint venture and other
forms of industrial or business co-operation; carriage of goods or passengers
by air, sea, rail or road.

4. International Commercial Arbitration helps to resolve disputes among the international

parties arising out of the internal commercial agreements.
5. International Commercial Arbitration is used by the traders of different countries as a
way of settling their business conflicts.
6. The procedure to apply for International Commercial Arbitration is the same as
domestic arbitration.
7. The scope of Section 2(1)(f) of the Arbitration and Conciliation Act was determined by
the Supreme Court in TDM Infrastructure Pvt. Ltd. v. UE Development India Pvt. Ltd.
 A. if the company has dual nationality, which means it is registered in foreign and
in India, then that company for this 1996 Act would be regarded as an Indian
corporation and not a foreign corporation.
8. International Commercial Arbitration allows the parties to resolve their disputes amicably
by maintaining their relationship and with less money by respecting each other’s
cultural and linguistic backgrounds.
9. International arbitration is also known as a ‘hybrid form of international dispute
resolution’ because international arbitration allows the mixing of two legal provisions,
i.e.,
A. the Code Civil Law Procedure, 1908, and
B. the Common Law Procedure.
10. The Model arbitration clause of the International Chamber of Commerce (ICC), for
instance, merely reads that all the disputes which arise out of or in connection with the
existing contract shall be settled under the rules of arbitration of the International
Chamber of Commerce by one or more arbitrators as appointed under the said rules.

11. Advantages:
A. Faster and easier than litigation
B. Less formal and cheaper
C. Accessible to everyone as parties may choose the arbitrator and seat
D. More confidential than court
E. Easier to enforce across borders than court judgements as most countries have
signed the New York Convention on the Recognition and Enforcement of
Arbitral awards.
12. Commercial Arbitration has several defining characteristics:
A. Arbitration is consensual, the parties must agree to arbitrate their differences.
B. Arbitrations are resolved by non-governmental decision makers, arbitrators do
not act as government agents, but private persons selected by the parties.
C. Arbitration produces a definitive and binding award, which is capable of
enforcement through national courts.

13. Justice Vijender Jain: an arbitration relating to a commercial dispute which has at
least one of the parties belonging to a foreign country.
14. There are three ways of establishing the international character of arbitration.
Arbitration may be international because:
A. its subject matter or its procedure or its organisation is international; or
B. the parties involved are connected with different jurisdictions; or
C. there is a combination of both.
15. .
Concept and Nature - Sovereign States, Claims Commissions,
and Tribunals.

Hybrid nature of Arbitral Process

Dispute Resolution in International Trade

Regulation of International Arbitration

Regulation of International Arbitration

Kinds of Arbitration

Review.

‌Language in arbitration: S22, 1996 Act

1. Communication between parties is a significant prospect to be considered while setting
disputes.
2. Involvement of parties from different jurisdictions speaking different languages is the
very nature of international arbitration.
3. For the same purpose, language in which the arbitral proceeding is conducted is of
great importance.
4. Determination of the procedural language is not a necessity as far as an arbitration
agreement is concerned.
5. Parties may even waive their right to determine the language.
6. However, an indication of the language in the agreement would be helpful in the
efficient conduct of proceedings.
7. The parties while referring to the dispute for arbitration may use the language specified
in the agreement.
8. Link Trading Joint Stock Co v. Moldova
Thus, even when other parties to arbitrations are from different linguistic backgrounds,
communications shall be made in the language which had been mutually agreed to by
the parties to the agreement.
9. The language clause in an agreement would further help the representatives and the
arbitrator decide on their participation in the proceedings
10. If the arbitrator/representatives are unfamiliar with the language agreed, it would add to
costs such as translation charges for documents.
11. It would lead to loss of time.
 12. Article 19, UNCITRAL Arbitration Rules, 2010
A. Upheld in Triple V Inc v. Star (Universal) Co Ltd
B. If the parties are not able to mutually decide on a language, the tribunal shall
decide promptly on the same.
13. Videocon Industries Ltd v. UOI:
A. The specification of language is important as the venue of the proceedings has
its own official languages (in this case, Malaya in Kuala Lumpur)
B. Although the seat chosen might be different, an express determination of
language evicts any doubt that may remain for the future.
14. Choosing the right language yields justice to the proceedings. Thus, parties and
tribunal
A. shall be cautious choosing one
B. Should extend due consideration while deciding
15. The selection of wrong language may lead to unintentional hassles and damage to the
proceedings.
16. The parties can mutually agree upon the language(s) to be used.
17. Failing which, the tribunal shall have complete authority to determine.
18. S22, 1996 Act: The language shall be used
A. Written statements
B. Hearing
C. Award
D. All formal procedural communications
19. All necessary documents such as documentary evidence shall be accompanied by a
translation to the language decided.
20. S22, Arb Act, 1996:
(1) The parties are free to agree upon the language or languages to be used in the
arbitral proceedings.
(2) Failing any agreement referred to in sub-section (1), the arbitral tribunal shall
determine the language or languages to be used in the arbitral proceedings.
(3) The agreement or determination, unless otherwise specified, shall apply to any
written statement by a party, any hearing and any arbitral award, decision or
other communication by the arbitral tribunal.
(4) The arbitral tribunal may order that any documentary evidence shall be
accompanied by a translation into the language or languages agreed upon by
the parties or determined by the arbitral tribunal.
21. .

‌Equal treatment of parties in arbitration: S18

1. Section 18 of the Act provides for equal treatment of parties.
2. It reads:
The parties shall be treated with equality and each party shall be
given a full opportunity to present this case.
3. Adherence and strict compliance with non-discrimination has always been the basic
notion of arbitral jurisprudence.
 4. It is the cornerstone of social justice and is, therefore, the principal aspect of equity and
good conscience.
5. The right of self defence and opportunity to present the case is an extended
imperative power of the parties.
6. Article 18 of the UNCITRAL Model Law recognises the same.
7. The parties are free to selectively determine the procedural rules that apply to arbitral
proceedings.
8. It is mandatory that each party should be given full opportunity to present its case and
shall also be treated equally.
9. Indus Mobile Distribution Ltd v. Datawind Innovations Ltd
The Arbitral Tribunal is not bound by the CPC, 1908 or Evidence Act, 1872 the parties
are free to determine and agree on the procedure to be followed by the tribunal.
10. They are guided by natural justice including Audi Alteram Partem, ie, the right to be
heard.

‌Seat v. venue in arbitration: S20

1. While, venue is merely a geographical location where the arbitration is conducted,
seat determines the legal jurisdiction governing the arbitration proceeding.

2. The Arbitration and Conciliation Act, 1996, does not mention the words 'Seat' or
'Venue.' However, these terms are commonly used in commercial agreements instead
of the word 'Place.' Interestingly, the Act does refer to the 'Place of arbitration' under
Section 20, but commercial agreements generally avoid using this term.

3. The 'venue of arbitration' refers to the appropriate or convenient geographic location

where the tribunal conducts its hearings. In contrast, the 'seat of arbitration' serves as
the legal domicile of the arbitration and generally determines the procedural law
applicable to the arbitration proceedings. Additionally, the seat establishes which court
possesses supervisory jurisdiction over the arbitration.

4. In the case of Roger Shashoua v. Mukesh Sharma,

A. The arbitration clause 14.4 stated, 'The venue of the arbitration shall be London,
United Kingdom.'
B. Additionally, under governing clause 17.6, it stated, 'This Agreement shall be
governed by and construed in accordance with the laws of India.'
C. The High Court of Wales had the opportunity to determine the seat of
arbitration in the absence of any express term in the agreement related to the
seat of arbitration.
D. The court held that when there is an express designation of the arbitration
venue and no alternative place is designated as the seat, combined with a
supranational body of rules governing the arbitration and no other significant
contrary indica, then the venue will be considered the seat of arbitration.
E. This principle became known as the Shashoua principle.
5. A Constitutional Bench of five judges of the Supreme Court of India referred to this
principle
A. for the first time in Bharat Aluminium Co. v. Kaiser Aluminium Technical
Services Inc. and
B. subsequently Enercon (India) Ltd. v. Enercon Gmbh.

6. The Law commission in its 246th report had recommended certain amendments to
the arbitration and conciliation act, 1996 to clear dispel the confusion of venue and seat.
A. Amendment of Section 2
- Insert S2(1)(hh): “seat of the arbitration” means the juridical seat of the
arbitration”
B. Amendment of Section 20
- delete the word “Place” and add the words “Seat and Venue” before the
words “of arbitration”.

7. The recommended amendments were not adopted in Arbitration and Conciliation

(Amendment) Act, 2015.
8. The SC provided the reasoning behind that in Indus Mobile Distribution (P) Ltd. v.
Datawind Innovations (P) Ltd.,
A. The amended Act, does not, however, contain the aforesaid amendments,
presumably because the BALCO judgement in no uncertain terms has referred
to “place” as “juridical seat” for the purpose of Section 2(2) of the Act.
B. It further made it clear that
- Section 20(1) and 20 (2) where the word “place” is used, refers to
“juridical seat”, whereas in
- Section 20 (3), the word “place” is equivalent to “venue”.
C. This being the settled law, it was found unnecessary to expressly incorporate
what the Constitution Bench of the Supreme Court has already done by way of
construction of the Act.

9. The Supreme court in BGS SGS SOMA JV v. NHPC, held that when the 'venue' of
arbitration is specified and no significant contrary indications exist, the designated
'venue' should be considered the 'seat' of the arbitration proceedings."
10. Hence, they are interchangeable unless specifically contradicted.
Mod 2: arb agreement and its validity

Validity of an Arbitration Agreement

Parties to an Arbitration Agreement

Analysis of an Arbitration Agreement

Submission Agreement

Arbitrability.

Confidentiality

Defective Arbitration Clauses

Multi-Party Arbitrations

Review.

Draft an arbitration clause based on the interests of the party

‌The contracting party namely X and Y intended to agree upon dispute resolution clause
facilitating arbitration in a natural country. Further, they wanted to apply Institutional
arbitration rules to be the applicable procedural law.

Any dispute, controversy, difference or claim arising out of or relating to this

contract, including the existence, validity, interpretation, performance, breach or
termination thereof or any dispute regarding non-contractual obligations arising out of or
relating to it shall be referred to and finally resolved by arbitration administered by
the Singapore International Arbitration Centre under the SIAC Rules, 2016 in force
when the Notice of Arbitration is submitted.

The parties hereby agree as follows:

1. The parties agree to submit their dispute (s), controversy (ies), claim (s), or
difference (s) to arbitration for resolution.
2. The law of this arbitration clause shall be governed by the SIAC Rules, 2016.
 3. The seat of arbitration shall be New Delhi ... (India).
4. The number of arbitrators shall be ... (one or three).
5. The Arbitrator(s) shall be nominated/appointed from the panel of Arbitrators of
Indian Dispute Resolution Centre.
6. The arbitration shall be administered by SIAC in accordance with its Rules.
7. The award rendered shall be final and binding on both the parties.
8. The arbitration proceedings shall be conducted in ... (English)"

Mod 3: Arbitrators and Applicable Laws

Meaning
1. Arbitration is a vehicle of dispute resolution in which parties to a contract select a neutral
arbitrator (s) to present their dispute for a legally binding ruling.
2. Arbitrations are resolved by non-governmental decision makers; arbitrators do not act as
government agents, but private persons selected by the parties.
3. The arbitrators should discuss with the counsel what steps should be taken to resolve
the dispute so that both the parties are satisfied with the procedure.
4. The 1996 Act provides extensive guidelines for various steps of the process of the
A. appointment of an arbitrator in Section 10 and Section 11,
B. the conditions under which an entity can be appointed as an arbitrator, the
conditions failing which the appointment of the arbitrator can be challenged,
under Section 12 and Section 13.
C. procedure and grounds for the removal of an arbitrator and the termination of
their mandate.
D. procedure for the substitution of the removed arbitrators in Section 15.
5. The arbitration procedure is incomplete without a neutral party to oversee and resolve
the dispute.
6. Arbitrators are independent, just and impartial third party entities unrelated to the
dispute at hand, appointed to pass an award that resolves the issue.
7. Section 18 of the Arbitration and Conciliation Act states that the parties to the dispute
must be treated with equality, and the arbitrators must provide them with full
opportunities to present their sides.

Appointment of Arbitrators /TD/

1. The principle of party autonomy is fundamental in international arbitration, allowing
parties to freely choose their arbitrators and the procedure for their appointment.
2. According to the UNCITRAL Model Law on International Commercial Arbitration,
parties can appoint arbitrators directly or delegate this responsibility to an appointing
authority
3. This may be done before or after a dispute arises.
4. This flexibility is crucial as it enables parties to select arbitrators with relevant expertise
and impartiality, tailored to the specifics of their dispute.
5. Article 11, UNCITRAL Model law, 1985: Appointment of arbitrators
(1) No person shall be precluded by reason of his nationality from acting as an
arbitrator, unless otherwise agreed by the parties.
(2) The parties are free to agree on a procedure of appointing the arbitrator or
arbitrators, subject to the provisions of paragraphs (4) and (5) of this article.
(3) Failing such agreement,
(a) in an arbitration with three arbitrators, each party shall appoint one
arbitrator, and the two arbitrators thus appointed shall appoint the third
arbitrator; if a party fails to appoint the arbitrator within thirty days of
receipt of a request to do so from the other party, or if the two
arbitrators fail to agree on the third arbitrator within thirty days of their
appointment, the appointment shall be made, upon request of a party,
by the court or other authority specified in article 6;
(b) In an arbitration with a sole arbitrator, if the parties are unable to agree on
the arbitrator, he shall be appointed, upon request of a party, by the court
or other authority specified in article 6.
In article 6, it is stated that each state shall specify the authority
competent to perform these functions
(4) Where, under an appointment procedure agreed upon by the parties,
(a) a party fails to act as required under such procedure, or
(b) the parties, or two arbitrators, are unable to reach an agreement
expected of them under such procedure, or
(c) a third party, including an institution, fails to perform any function
entrusted to it under such procedure, any party may request the court
or other authority specified in article 6 to take the necessary measure,
unless the agreement on the appointment procedure provides other
means for securing the appointment.
(5) A decision on a matter entrusted by paragraph (3) or (4) of this article to the
court or other authority specified in article 6 shall be subject to no appeal. The
court or other authority, in appointing an arbitrator, shall have due regard to any
qualifications required of the arbitrator by the agreement of the parties and to
such considerations as are likely to secure the appointment of an independent
and impartial arbitrator and, in the case of a sole or third arbitrator, shall take
into account as well the advisability of appointing an arbitrator of a nationality
other than those of the parties.

6. Article 12, Constitution of the Arbitration tribunal, ICC Rules, 2021

(1) The disputes shall be decided by a sole arbitrator or by three arbitrators. 2 Where
the parties have not agreed upon the number of arbitrators, the Court shall
appoint a sole arbitrator, save where it appears to the Court that the dispute is
such as to warrant the appointment of three arbitrators. In such case, the
claimant shall nominate an arbitrator within 15 days from receipt of the
 notification of the decision of the Court, and the respondent shall nominate an
arbitrator within 15 days from receipt of the notification of the nomination made
by the claimant. If a party fails to nominate an arbitrator, the appointment shall be
made by the Court. Sole Arbitrator 3 Where the parties have agreed that the
dispute shall be resolved by a sole arbitrator, they may, by agreement, nominate
the sole arbitrator for confirmation. If the parties fail to nominate a sole arbitrator
within 30 days from the date when the claimant’s Request for Arbitration has
been received by the other party or parties, or within such additional time as may
be allowed by the Secretariat, the sole arbitrator shall be appointed by the Court.
Three Arbitrators 4 Where the parties have agreed that the dispute shall be
resolved by three arbitrators, each party shall nominate in the Request and the
Answer, respectively, one arbitrator for confirmation. If a party fails to nominate
an arbitrator, the appointment shall be made by the Court. 5 Where the dispute is
to be referred to three arbitrators, the third arbitrator, who will act as president of
the arbitral tribunal, shall be appointed by the Court, unless the parties have
agreed upon another procedure for such appointment, in which case the
nomination will be subject to confirmation pursuant to Article 13. Should such
procedure not result in a nomination within 30 days from the confirmation or
appointment of the co-arbitrators or any other time limit agreed by the parties or
fixed by the Court, the third arbitrator shall be appointed by the Court. 6 Where
there are multiple claimants or multiple respondents, and where the dispute is to
be referred to three arbitrators, the multiple claimants, jointly, and the multiple
respondents, jointly, shall nominate an arbitrator for confirmation pursuant to
Article 13. 7 Where an additional party has been joined (Article 7(1)), and where
the dispute is to be referred to three arbitrators, the additional party may, jointly
with the claimant(s) or with the respondent(s), nominate an arbitrator for
confirmation pursuant to Article 13 and subject to Article 7(5). 8 In the absence of
a joint nomination pursuant to Articles 12(6) or 12(7) and where all parties are
unable to agree to a method for the constitution of the arbitral tribunal, the Court
may appoint each member of the arbitral tribunal and shall designate one of them
to act as president. In such cases, the Court shall be at liberty to choose any
person it regards as suitable to act as arbitrator, applying Article 13 when it
considers this appropriate. 9 Notwithstanding any agreement by the parties on
the method of constitution of the arbitral tribunal, in exceptional circumstances
the Court may appoint each member of the arbitral tribunal to avoid a significant
risk of unequal treatment and unfairness that may affect the validity of the award.
(2)
7. Article 13, Appointment and confirmation of arbitrators - ICC Rules of Arbitration,
2021.
(1) In confirming or appointing arbitrators, the Court shall consider the prospective
arbitrator’s nationality, residence and other relationships with the countries
of which the parties or the other arbitrators are nationals and the prospective
arbitrator’s availability and ability to conduct the arbitration in accordance
 with the Rules. The same shall apply where the Secretary General confirms
arbitrators pursuant to Article 13(2).
(2) The Secretary General may confirm as co-arbitrators, sole arbitrators and
presidents of arbitral tribunals persons nominated by the parties or
pursuant to their particular agreements, provided that the statement they have
submitted contains no qualification regarding impartiality or independence or
that a qualified statement regarding impartiality or independence has not given
rise to objections. Such confirmation shall be reported to the Court at one of
its next sessions. If the Secretary General considers that a co-arbitrator, sole
arbitrator or president of an arbitral tribunal should not be confirmed, the matter
shall be submitted to the Court.
(3) Where the Court is to appoint an arbitrator, it shall make the appointment upon
proposal of an ICC National Committee or Group that it considers to be
appropriate. If the Court does not accept the proposal made, or if the National
Committee or Group fails to make the proposal requested within the time limit
fixed by the Court, the Court may
- repeat its request,
- request a proposal from another National Committee or Group that it
considers to be appropriate, or
- appoint directly any person whom it regards as suitable.
(4) The Court may also appoint directly to act as arbitrator any person whom it
regards as suitable where:
(a) one or more of the parties is a state or may be considered to be a state
entity;
(b) the Court considers that it would be appropriate to appoint an arbitrator
from a country or territory where there is no National Committee or
Group; or
(c) the President certifies to the Court that circumstances exist which, in
the President’s opinion, make a direct appointment necessary and
appropriate.
(5) Where the Court is to appoint the sole arbitrator or the president of the arbitral
tribunal, such sole arbitrator or president of the arbitral tribunal shall be of a
nationality other than those of the parties. However, in suitable
circumstances and provided that none of the parties objects within the time
limit fixed by the Secretariat, the sole arbitrator or the president of the arbitral
tribunal may be chosen from a country of which any of the parties is a national.
(6) Whenever the arbitration agreement upon which the arbitration is based arises
from a treaty, and unless the parties agree otherwise, no arbitrator shall have
the same nationality of any party to the arbitration.
8. .
The Arbitration Act, 1996 - can skip
1. Party autonomy ensures that the parties are generally free to determine their own
procedure for appointing the arbitrator or arbitrators, including the procedure for the
selection of an umpire or chairman.
2. If the parties decline to specify the mode for selecting the arbitrators, then the relevant
legal system will usually provide a default selection process.
3. Section 10 of the Act –
A. “Number of Arbitrators” grants freedom of choice to the parties as to the
number of arbitrators, with the condition that it must be an odd number.
B. If the parties are unable to agree on the number of arbitrators, there could be a
sole arbitrator.
4. The Arbitration and Conciliation Act, 196, does not provide any qualifications or
characteristics that an entity must satisfy in order to become an arbitrator.
5. As stated in Section 11(1), it is the parties’ discretion to choose to appoint a person of
any nationality to be the arbitrator to their dispute.
6. S11(2) provides the parties with the freedom to not only appoint the arbitrators of their
choice, but to also determine the procedure to do so as well. This means that the ambit
and scope for any entities or individuals to be arbitrators to a dispute is vast as long as
the parties to dispute consent to the appointment, they are eligible.
7. Characteristically, appointments will usually be made on the following basis:
A. If the tribunal is to consist of a sole arbitrator, the parties shall jointly appoint
the arbitrator within a stipulated time frame of a request in writing by either party
to do so.
B. If the tribunal is to consist of an even number of arbitrators: Each party shall
appoint an equal number of arbitrators and the arbitrators so appointed shall
forthwith appoint a third arbitrator as the chairman of the tribunal.
C. If the parties arrive at a deadlock where appointing an arbitrator is concerned,
they will be permitted to refer, under s. 11, Arbitration and Conciliation Act, 1996,
to the Chief Justice of the High Court of the State in whose jurisdiction they are
(for domestic arbitration) or the Chief Justice of India (for international
arbitration), to appoint an arbitrator.
8. S11:
S11: Appointment of arbitrators:
(1) A person of any nationality may be an arbitrator, unless otherwise agreed by
the parties.
(2) Subject to sub-section (6), the parties are free to agree on a procedure for
appointing the arbitrator or arbitrators.
(3) Failing any agreement referred to in sub-section (2), in an arbitration with three
arbitrators, each party shall appoint one arbitrator, and the two appointed
arbitrators shall appoint the third arbitrator who shall act as the presiding
arbitrator.
(4) If the appointment procedure in sub-section (3) applies and—
(a) a party fails to appoint an arbitrator within thirty days from the receipt
of a request to do so from the other party; or
 (b) the two appointed arbitrators fail to agree on the third arbitrator within
thirty days from the date of their appointment,
the appointment shall be made, upon request of a party, by the
Supreme Court or, as the case may be, the High Court or any person
or institution designated by such Court
(5) Failing any agreement referred to in sub-section (2), in an arbitration with a sole
arbitrator, if the parties fail to agree on the arbitrator within thirty days from
receipt of a request by one party from the other party to so agree the
appointment shall be made, upon request of a party, by the Supreme Court or,
as the case may be, the High Court or any person or institution designated by
such Court.
(6) Where, under an appointment procedure agreed upon by the parties,
(a) a party fails to act as required under that procedure; or
(b) the parties, or the two appointed arbitrators, fail to reach an agreement
expected of them under that procedure; or
(c) a person, including an institution, fails to perform any function
entrusted to him or it under that procedure, a party may request the
Supreme Court or, as the case may be, the High Court or any person or
institution designated by such Court] to take the necessary measure,
unless the agreement on the appointment procedure provides other
means for securing the appointment.
(6A) The Supreme Court or, as the case may be, the High Court, while
considering any application under sub-section (4) or sub-section (5) or
sub-section (6), shall, notwithstanding any judgement, decree or order of any
Court, confine to the examination of the existence of an arbitration agreement.
(6B) The designation of any person or institution by the Supreme Court or, as
the case may be, the High Court, for the purposes of this section shall not be
regarded as a delegation of judicial power by the Supreme Court or the High
Court.
(7) A decision on a matter entrusted by sub-section (4) or sub-section (5) or
sub-section (6) to the Supreme Court or, as the case may be, the High Court or
the person or institution designated by such Court is final and no appeal
including Letters Patent Appeal shall lie against such decision
(8) The Supreme Court or, as the case may be, the High Court or the person or
institution designated by such Court, before appointing an arbitrator, shall seek
a disclosure in writing from the prospective arbitrator in terms of sub-section
(1) of section 12, and have due regard to
(a) any qualifications required for the arbitrator by the agreement of the
parties; and
(b) the contents of the disclosure and other considerations are likely to
secure the appointment of an independent and impartial arbitrator.
(9) In the case of appointment of sole or third arbitrator in an international
commercial arbitration, the Supreme Court or the person or institution
 designated by that Court may appoint an arbitrator of a nationality other than
the nationalities of the parties where the parties belong to different nationalities.
(10) The Supreme Court or, as the case may be, the High Court, may make such
a scheme as the said Court may deem appropriate for dealing with matters
entrusted by subsection (4) or sub-section (5) or sub-section (6), to it.
(11) Where more than one request has been made under sub-section (4) or
sub-section (5) or sub-section (6) to the Chief Justices of different High Courts
or their designates, different High Courts or their designates, the High Court or its
designate to whom the request has been first made under the relevant
sub-section shall alone be competent to decide on the request.
(12)
(a) Where the matters referred to in sub-sections (4), (5), (6), (7), (8) and
sub-section (10) arise in an international commercial arbitration, the
reference to the “Supreme Court or, as the case may be, the High Court”
in those sub-sections shall be construed as a reference to the “Supreme
Court”; and
(b) Where the matters referred to in sub-sections (4), (5), (6), (7), (8) and
sub-section (10) arise in any other arbitration, the reference to “the
Supreme Court or, as the case may be, the High Court” in those
sub-sections shall be construed as a reference to the “High Court” within
whose local limits the principal Civil Court referred to in clause (e) of
sub-section (1) of section 2 is situate, and where the High Court itself is
the Court referred to in that clause, to that High Court.
(13) An application made under this section for appointment of an arbitrator or
arbitrators shall be disposed of by the Supreme Court or the High Court or the
person or institution designated by such Court, as the case may be, as
expeditiously as possible and an endeavour shall be made to dispose of the
matter within a period of sixty days from the date of service of notice on the
opposite party.
(14) For the purpose of determining the fees of the arbitral tribunal and the
manner of its payment to the arbitral tribunal, the High Court may frame such
rules as may be necessary, after taking into consideration the rates specified in
the Fourth Schedule.
(15)
9. .

Case law
‌ arshan Motor vehicle pvt ltd in their dealership dispute with Anu, declares X as a party
D
appointed arbitrator.
Anu appoints Mr.Y as party appointed arbitrator.
X and Y jointly appointed Mr.Z as a presiding arbitrator to the dispute in the proceedings.
W&W pvt ltd, a financial institution known for third party funding for Arbitration funded
Darshan for covering their cost of arbitration.
So Mr.X is a stockholder of W&W on disclosure of the third party information by the
party. Challenging Mr.X and his removal, can it be sustained?

1. TRF Ltd v. Energo Engg Projects Ltd

A. Considering the question on nomination of the arbitrator, the court clarified that
the person acting arbitrator who is himself deemed as ineligible for acting as an
arbitrator in that particular case, cannot nominate an arbitrator in place of himself.
B. That would tantamount to running the arbitration as per his choice only

2. Sheetal Maruti Kurundwade v. Metal Power Analytical Ltd

A. “Independence” and “Impartiality” of the arbitrator was in question on account of
the fact that the presiding arbitrator had been engaged as a counsel for the
respondent’s lawyer in the previous account.
B. However, considering the fact that those previous cases or incidents did not
anyhow relate the current matter, the court upheld the eligibility of the arbitrator.
C. The court held that there should be sufficient “proximate” relationship between
the counsel-arbitrator and the litigant.

3. S11: Appointment of arbitrators: S11(8): independent and impartial

4. S12: Grounds for challenge - S12(1)(a): justifiable doubts to independence and
impartiality
5. https://blog.ipleaders.in/removal-of-an-arbitrator/#:~:text=Once%20an%20arbitrato
r%20is%20appointed,for%20a%20just%20resolution%2C%20or TD/
The parties are at their discretion to appoint the arbitrator to decide their case. If the parties are
not able to appoint the arbitrators mutually due to some issues then the court allows the parties
to appoint each arbitrator and then these two arbitrators will appoint the third party who will be
neutral. If the parties fail to appoint the arbitrators within thirty days or the two arbitrators fail to
appoint the third arbitrator then the parties can request the Supreme Court and High Court to
appoint the arbitrators. The High Court or the Supreme Court can appoint any person or
institution to appoint arbitrators. In the cases of International Commercial Arbitration, the
Supreme Court can appoint the arbitrators for the parties, and in the cases of domestic
arbitrations, the High Court appoints the arbitrators.

The Challenge to the Appointment of Arbitrators

The appointment of arbitrators can be challenged only on these two criteria:
A. When there are circumstances that raise reasonable suspicions about his or her
independence, impartiality; or
B. The arbitrator does not possess the qualities the parties require.
Qualities Required in International Arbitrators - Impartiality and
Independence of Arbitrators
1. In UNCITRAL Model Law's Article 11 on Appointment of arbitrators,
(5) specifies that the court or other authority, in appointing an arbitrator, shall have
due regard to any qualifications required of the arbitrator by the agreement
of the parties and to such considerations as are likely to secure the appointment of an
independent and impartial arbitrator and, in the case of a sole or third arbitrator,
shall take into account as well the advisability of appointing an arbitrator of a nationality
other than those of the parties.

2. Article 12, UNCITRAL: Grounds for challenge

(1) When a person is approached in connection with his possible appointment as
an arbitrator, he shall disclose any circumstances likely to give rise to
justifiable doubts as to his impartiality or independence. An arbitrator, from
the time of his appointment and throughout the arbitral proceedings, shall
without delay disclose any such circumstances to the parties unless they have
already been informed of them by him.
(2) An arbitrator may be challenged only if circumstances exist that give rise to
justifiable doubts as to his impartiality or independence, or if he does not
possess qualifications agreed to by the parties. A party may challenge an
arbitrator appointed by him, or in whose appointment he has participated, only for
reasons of which he becomes aware after the appointment has been made.

3. Article 11, ICC Rules: General Provisions

(1) Every arbitrator must be and remain impartial and independent of the parties
involved in the arbitration.
(2) Before appointment or confirmation, a prospective arbitrator shall sign a
statement of acceptance, availability, impartiality and independence. The
prospective arbitrator shall disclose in writing to the Secretariat any facts or
circumstances which might be of such a nature as to call into question the
arbitrator’s independence in the eyes of the parties, as well as any
circumstances that could give rise to reasonable doubts as to the arbitrator’s
impartiality. The Secretariat shall provide such information to the parties in
writing and fix a time limit for any comments from them.
(3) An arbitrator shall immediately disclose in writing to the Secretariat and to
the parties any facts or circumstances of a similar nature to those referred to in
Article 11(2) concerning the arbitrator’s impartiality or independence which may
arise during the arbitration.

4. Article 13, ICC Rules: Appointment and confirmation of the arbitrators:

 (2) The Secretary General may confirm as co-arbitrators, sole arbitrators and
presidents of arbitral tribunals persons nominated by the parties or pursuant to their
particular agreements, provided that the statement they have submitted contains no
qualification regarding impartiality or independence or that a qualified statement
regarding impartiality or independence has not given rise to objections. Such
confirmation shall be reported to the Court at one of its next sessions. If the Secretary
General considers that a co-arbitrator, sole arbitrator or president of an arbitral tribunal
should not be confirmed, the matter shall be submitted to the Court.

5. Article 14, ICC Rules: Challenge of arbitrators:

(1) A challenge of an arbitrator, whether for an alleged lack of impartiality or
independence, or otherwise, shall be made by the submission to the
Secretariat of a written statement specifying the facts and circumstances on
which the challenge is based.
6. .

Challenge and Replacement of Arbitrators

UNCITRAL Model law

1. Article 12. Grounds for challenge
(1) When a person is approached in connection with his possible appointment as
an arbitrator, he shall disclose any circumstances likely to give rise to
justifiable doubts as to his impartiality or independence. An arbitrator, from
the time of his appointment and throughout the arbitral proceedings, shall
without delay disclose any such circumstances to the parties unless they have
already been informed of them by him.
(2) An arbitrator may be challenged only if circumstances exist that give rise to
justifiable doubts as to his impartiality or independence, or if he does not
possess qualifications agreed to by the parties. A party may challenge an
arbitrator appointed by him, or in whose appointment he has participated,
only for reasons of which he becomes aware after the appointment has been
made.

2. Article 13. Challenge procedure

(1) The parties are free to agree on a procedure for challenging an arbitrator,
subject to the provisions of paragraph (3) of this article.
(2) Failing such agreement, a party who intends to challenge an arbitrator shall,
within fifteen days after becoming aware of the constitution of the arbitral
tribunal or after becoming aware of any circumstance referred to in article
12(2), send a written statement of the reasons for the challenge to the arbitral
tribunal. Unless the challenged arbitrator withdraws from his office or the
other party agrees to the challenge, the arbitral tribunal shall decide on the
challenge.
 (3) If a challenge under any procedure agreed upon by the parties or under the
procedure of paragraph (2) of this article is not successful, the challenging
party may request, within thirty days after having received notice of the
decision rejecting the challenge, the court or other authority specified in article
6 to decide on the challenge, which decision shall be subject to no appeal;
while such a request is pending, the arbitral tribunal, including the challenged
arbitrator, may continue the arbitral proceedings and make an award.

3. Article 14. Failure or impossibility to act

(1) If an arbitrator becomes de jure or de facto unable to perform his functions
or for other reasons fails to act without undue delay, his mandate terminates if
he withdraws from his office or if the parties agree on the termination.
Otherwise, if a controversy remains concerning any of these grounds, any party
may request the court or other authority specified in article 6 to decide on the
termination of the mandate, which decision shall be subject to no appeal.
(2) If, under this article or article 13(2), an arbitrator withdraws from his office or a
party agrees to the termination of the mandate of an arbitrator, this does not
imply acceptance of the validity of any ground referred to in this article or
article 12(2).

4. Article 15. Appointment of substitute arbitrator

Where the mandate of an arbitrator terminates under article 13 or 14 or because of his
withdrawal from office for any other reason or because of the revocation of his
mandate by agreement of the parties or in any other case of termination of his
mandate, a substitute arbitrator shall be appointed according to the rules that were
applicable to the appointment of the arbitrator being replaced.
5. .

ICC Rules, 2021

1. Article 14 – Challenge of Arbitrators
(1) A challenge of an arbitrator, whether for an alleged lack of impartiality or
independence, or otherwise, shall be made by the submission to the
Secretariat of a written statement specifying the facts and circumstances on
which the challenge is based.
(2) For a challenge to be admissible, it must be submitted by a party either within
30 days from receipt by that party of the notification of the appointment or
confirmation of the arbitrator, or within 30 days from the date when the party
making the challenge was informed of the facts and circumstances on which the
challenge is based if such date is subsequent to the receipt of such
notification.
(3) The Court shall decide on the admissibility and, at the same time, if necessary,
on the merits of a challenge after the Secretariat has afforded an opportunity
for the arbitrator concerned, the other party or parties and any other members
 of the arbitral tribunal to comment in writing within a suitable period of time.
Such comments shall be communicated to the parties and to the arbitrators.

2. Article 15: Replacement of Arbitrators

(1) An arbitrator shall be replaced upon
- death,
- acceptance by the Court of the arbitrator’s resignation,
- acceptance by the Court of a challenge, or
- acceptance by the Court of a request of all the parties.
(2) An arbitrator shall also be replaced on the Court’s own initiative when it
decides that the arbitrator is prevented de jure or de facto from fulfilling the
arbitrator’s functions, or that the arbitrator is not fulfilling those functions in
accordance with the Rules or within the prescribed time limits.
(3) When, on the basis of information that has come to its attention, the Court
considers applying Article 15(2) (replacement), it shall decide on the matter
after the arbitrator concerned, the parties and any other members of the arbitral
tribunal have had an opportunity to comment in writing within a suitable
period of time. Such comments shall be communicated to the parties and to
the arbitrators.
(4) When an arbitrator is to be replaced, the Court has discretion to decide
whether or not to follow the original nominating process. Once
reconstituted, and after having invited the parties to comment, the arbitral
tribunal shall determine if and to what extent prior proceedings shall be
repeated before the reconstituted arbitral tribunal.
(5) Subsequent to the closing of the proceedings, instead of replacing an
arbitrator who has died or been removed by the Court pursuant to Articles 15(1)
or 15(2), the Court may decide, when it considers it appropriate, that the
remaining arbitrators shall continue the arbitration. In making such
determination, the Court shall take into account the views of the remaining
arbitrators and of the parties and such other matters that it considers
appropriate in the circumstances.

3. Article 11: General provisions

(4) The decisions of the Court as to the appointment, confirmation, challenge or
replacement of an arbitrator shall be final.

4. Appendix V – Emergency Arbitrator Rules

Article 3: Challenge of an emergency arbitrator
A. A challenge against the emergency arbitrator must be made within three days
from receipt by the party making the challenge of the notification of the
appointment or from the date when that party was informed of the facts and
circumstances on which the challenge is based if such date is subsequent to
the receipt of such notification.
 B. The challenge shall be decided by the Court after the Secretariat has afforded
an opportunity for the emergency arbitrator and the other party or parties to
provide comments in writing within a suitable period of time.

5. .

1996 Act: Fifth schedule in ref with S12

1. S12: Grounds for challenge:
(1) When a person is approached in connection with his possible appointment as
an arbitrator, he shall disclose in writing any circumstances,
(a) such as the existence either direct or indirect, of any past or present
relationship with or interest in any of the parties or in relation to the
subject-matter in dispute, whether financial, business, professional or
other kind, which is likely to give rise to justifiable doubts as to his
independence or impartiality; and
(b) which are likely to affect his ability to devote sufficient time to the
arbitration and in particular his ability to complete the entire arbitration
within a period of twelve months.
Explanation 1.—The grounds stated in the Fifth Schedule shall guide in
determining whether circumstances exist which give rise to justifiable
doubts as to the independence or impartiality of an arbitrator.
Explanation 2.—The disclosure shall be made by such person in the form
specified in the Sixth Schedule.
(2)
(3) An arbitrator may be challenged only if
(a) circumstances exist that give rise to justifiable doubts as to his
independence or impartiality, or
(b) he does not possess the qualifications agreed to by the parties.
(4) A party may challenge an arbitrator appointed by him, or in whose appointment
he has participated, only for reasons of which he becomes aware after the
appointment has been made.
(5) Notwithstanding any prior agreement to the contrary, any person whose
relationship, with the parties or counsel or the subject-matter of the dispute,
falls under any of the categories specified in the Seventh Schedule shall be
ineligible to be appointed as an arbitrator:
Provided that parties may, subsequent to disputes having arisen between
them, waive the applicability of this subsection by an express agreement in
writing

2. 5th schedule: grounds give rise to justifiable doubts as to the independence or

impartiality of arbitrators wrt S12(1)(b)
A. Arbitrator’s relationship with the parties or counsel
- Is in a business relationship,
- Represents or is the lawyer the firm of the counsel
 - Part of management in affiliate of one of the parties
- Commercial relationship
- Regular advisor of the appointing party
- Close family relationship
- Financial interest - arbitrator/close family
B. Relationship of the arbitrator to the dispute
- Given legal advice or expert opinion to a party
- Previous involvement in the case
C. Arbitrator’s direct or indirect interest in the dispute
- Holds shares in the parties/its affiliates
- Close family has financial interest in the outcome
- Him/close family has close relationship with concerned 3rd party
D. Previous services for one of the parties or other involvement in the case
- As a counsel or arbitrator in the past three years
E. Relationship between an arbitrator and another arbitrator or counsel
- Two arbitrators are lawyers of the same firm
- Lawyer of one’s firm is an arbitrator in another dispute of one party
- A close family member of the arbitrator is a partner or employee of the
law firm representing one of the parties
- The arbitrator has in the past three years received more than three
appointments by the same counsel or the same law firm
F. Relationship between arbitrator and party and others involved in the
arbitration
- The arbitrator’s law firm is currently acting adverse to one of the parties or
an affiliate of one of the parties.
- The arbitrator had been associated within the past three years with a
party or an affiliate of one of the parties in a professional capacity, such
as a former employee or partner.
G. Other circumstances
3. .

Powers of Arbitrators
1. Conduct the arbitration
2. Ensure that each party has the right to be heard, present evidence, and cross-examine
witnesses.
3. Impose sanctions for misconduct or bad faith
4. Administer oaths to parties and witnesses
5. Make awards
6. Seek court assistant
7. Administer interrogatories
8. Proceed ex-parte
UNCITRAL Model Law
1. Article 17: Power of arbitral tribunal to order interim measures
(1) Unless otherwise agreed by the parties, the arbitral tribunal may, at the
request of a party, grant interim measures.
(2) An interim measure is any temporary measure, whether in the form of an award
or in another form, by which, at any time prior to the issuance of the award by
which the dispute is finally decided, the arbitral tribunal orders a party to:
(a) Maintain or restore the status quo pending determination of the dispute;
(b) Take action that would prevent, or refrain from taking action that is likely
to cause, current or imminent harm or prejudice to the arbitral process
itself;
(c) Provide a means of preserving assets out of which a subsequent
award may be satisfied; or
(d) Preserve evidence that may be relevant and material to the resolution of
the dispute.

2. Article 19. Determination of rules of procedure

(1) Subject to the provisions of this Law, the parties are free to agree on the
procedure to be followed by the arbitral tribunal in conducting the proceedings.
(2) Failing such agreement, the arbitral tribunal may, subject to the provisions of
this Law, conduct the arbitration in such manner as it considers appropriate.
The power conferred upon the arbitral tribunal includes the power to determine
the
- admissibility,
- relevance,
- materiality and
- weight of any evidence.
3. .

ICC Rules, 2021

1. Article 21(3):
The arbitral tribunal shall assume the powers of an amiable compositeur or decide ex
aequo et bono only if the parties have agreed to give it such powers.
A. Amiable compositeur is a term that refers to a tribunal or arbitrator who is
authorised to decide a dispute based on fairness and equity, rather than
strictly following the rules of law. The term literally translates to "amicable or
friendly conciliator".
B. Ex aequo et bono is a Latin phrase that means "according to what is
equitable and good". It's a legal term that refers to the power of arbitrators to
decide a case based on fairness and equity, rather than the law. This concept is
often used in international law

2. Article 26(2):
 If any of the parties, although duly summoned, fails to appear without valid excuse,
the arbitral tribunal shall have the power to proceed with the hearing

3. Article 28(2):
Before the file is transmitted to the arbitral tribunal, and in appropriate circumstances
even thereafter, the parties may apply to any competent judicial authority for interim or
conservatory measures.
The application of a party to a judicial authority for such measures or for the
implementation of any such measures ordered by an arbitral tribunal shall not be
deemed to be an infringement or a waiver of the arbitration agreement and shall not
affect the relevant powers reserved to the arbitral tribunal.
Any such application and any measures taken by the judicial authority must be
notified without delay to the Secretariat. The Secretariat shall inform the arbitral
tribunal thereof.
A. Order interim measures
B. Not be deterred by such measures
C. Informed of application interim measures
D.
4. .

Duties of Arbitrators
1. Maintaining confidentiality
2. Resolving disputed efficiently
3. Setting a time and place
4. Determining the rules
5. Regulating the hearing
6. Making an award
7. Avoiding misconduct

UNCITRAL Model Law

1. Article 12: When a person is approached in connection with his possible appointment
as an arbitrator, he shall disclose any circumstances likely to give rise to justifiable
doubts as to his impartiality or independence. An arbitrator, from the time of his
appointment and throughout the arbitral proceedings, shall without delay disclose any
such circumstances to the parties unless they have already been informed of them by
him.

ICC Rules, 2021

1. Article 11:
A. Before appointment or confirmation, a prospective arbitrator shall sign a
statement of acceptance, availability, impartiality and independence.
 B. Arbitrator shall disclose circumstances that may affect their independence and
partiality
2. Article 13: no arbitrator shall have the same nationality of any party to the arbitration.

Jurisdiction

UNCITRAL Model Law

1. Chapter IV: Jurisdiction of arbitral tribunal
2. Article 16: Competence of arbitral tribunal to rule on its jurisdiction
(1) The arbitral tribunal may rule on its own jurisdiction, including any objections
with respect to the existence or validity of the arbitration agreement. For that
purpose, an arbitration clause which forms part of a contract shall be treated
as an agreement independent of the other terms of the contract. A decision
by the arbitral tribunal that the contract is null and void shall not entail ipso
jure the invalidity of the arbitration clause.
(2) A plea that the arbitral tribunal does not have jurisdiction shall be raised not
later than the submission of the statement of defence. A party is not
precluded from raising such a plea by the fact that he has appointed, or
participated in the appointment of, an arbitrator. A plea that the arbitral
tribunal is exceeding the scope of its authority shall be raised as soon as the
matter alleged to be beyond the scope of its authority is raised during the
arbitral proceedings. The arbitral tribunal may, in either case, admit a later
plea if it considers the delay justified.
(3) The arbitral tribunal may rule on a plea referred to in paragraph (2) of this article
either as a preliminary question or in an award on the merits. If the arbitral
tribunal rules as a preliminary question that it has jurisdiction, any party may
request, within thirty days after having received notice of that ruling, the court
specified in article 6 to decide the matter, which decision shall be subject to no
appeal; while such a request is pending, the arbitral tribunal may continue the
arbitral proceedings and make an award.
3. .

ICC Rules, 2021

1. Article 6(3):
Any question of jurisdiction or of whether the claims may be determined together in
that arbitration shall be decided directly by the arbitral tribunal, unless the Secretary
General refers the matter to the Court for its decision pursuant to Article 6(4).
2. Article 6(5):
In all matters decided by the Court under Article 6(4), any decision as to the
jurisdiction of the arbitral tribunal, except as to parties or claims with respect to which
the Court decides that the arbitration cannot proceed, shall then be taken by the arbitral
tribunal itself.
 3. Article 6(9):
Unless otherwise agreed, the arbitral tribunal shall not cease to have jurisdiction by
reason of any allegation that the contract is non-existent or null and void, provided
that the arbitral tribunal upholds the validity of the arbitration agreement. The arbitral
tribunal shall continue to have jurisdiction to determine the parties’ respective rights
and to decide their claims and pleas even though the contract itself may be
non-existent or null and void.

4. Article 7(5):
A. Any Request for Joinder made after the confirmation or appointment of any
arbitrator shall be decided by the arbitral tribunal once constituted and shall be
subject to the additional party accepting the constitution of the arbitral
tribunal and agreeing to the Terms of Reference, where applicable.
B. In deciding on such a Request for Joinder, the arbitral tribunal shall take into
account all relevant circumstances, which may include whether the arbitral
tribunal has prima facie jurisdiction over the additional party, the timing of
the Request for Joinder, possible conflicts of interests and the impact of the
joinder on the arbitral procedure.
C. Any decision to join an additional party is without prejudice to the arbitral
tribunal’s decision as to its jurisdiction with respect to that party.

5. Article 43: Governing law

Any claims arising out of or in connection with the administration of the arbitration
proceedings by the Court under the Rules shall be governed by French law and
settled by the Paris Judicial Tribunal (Tribunal Judiciaire de Paris) in France, which
shall have exclusive jurisdiction.

Review: AI generated
1. The review process for arbitral awards varies significantly across jurisdictions but
generally focuses on ensuring that the arbitration was conducted fairly and according to
agreed-upon rules.
2. In many cases, national courts have limited grounds for reviewing arbitral awards,
primarily checking for:
A. Public Policy Violations: Courts may refuse to enforce an award if it
contravenes fundamental principles of public policy in the jurisdiction where
enforcement is sought.
B. Procedural Fairness: This includes ensuring that both parties had a fair
opportunity to present their case and that the arbitrators acted within their
authority

3. Article V, New York Convention:

 (1) Recognition and enforcement of the award may be refused, at the request of
the party against whom it is invoked, only if that party furnishes to the
competent authority where the recognition and enforcement is sought, proof
that:
(a) The parties to the agreement referred to in article II were, under the law
applicable to them, under some incapacity, or the said agreement is not
valid under the law to which the parties have subjected it or, failing any
indication thereon, under the law of the country where the award was
made; or
(b) The party against whom the award is invoked was not given proper
notice of the appointment of the arbitrator or of the arbitration
proceedings or was otherwise unable to present his case; or
(c) The award deals with a difference not contemplated by or not falling
within the terms of the submission to arbitration, or it contains decisions
on matters beyond the scope of the submission to arbitration,
- provided that, if the decisions on matters submitted to arbitration
can be separated from those not so submitted, that part of the
award which contains decisions on matters submitted to
arbitration may be recognized and enforced; or
(d) The composition of the arbitral authority or the arbitral procedure was
not in accordance with the agreement of the parties, or, failing such
agreement, was not in accordance with the law of the country where the
arbitration took place; or
(e) The award has not yet become binding on the parties, or has been set
aside or suspended by a competent authority of the country in which,
or under the law of which, that award was made.

(2) Recognition and enforcement of an arbitral award may also be refused if the
competent authority in the country where recognition and enforcement is
sought finds that:
(a) The subject matter of the difference is not capable of settlement by
arbitration under the law of that country; or
(b) The recognition or enforcement of the award would be contrary to the
public policy of that country.

4. In the United States,the Federal Arbitration Act (FAA) governs arbitration and
provides limited grounds for vacating an arbitral award, such as evident partiality or
misconduct by arbitrators. U.S. courts typically uphold arbitral awards unless there are
significant procedural flaws or violations of public policy.

Conflict Rules and the Search for the Applicable Law; Other
Applicable Rules and Guidelines and Challenges
1. Ma'am said: UNCITRAL Model law and 1996 act but write them wrt below information
 2. The law and practice of international commercial arbitration suggests that there are at
least five systems of law that are relevant and have a bearing on the process and
the outcome of arbitration, which are as follows:
A. law governing the contract
B. law governing the arbitration agreement
C. law governing the arbitral proceedings
D. law governing the capacity of parties to sign and get into an arbitration
agreement; and
E. the law governing the land of enforcement of arbitral awards.
3. Out of these, as a matter of best practice, at least the
A. law governing the contract
B. law governing the arbitration agreement
C. law governing the arbitral proceedings
are expressly mentioned in a contract itself, which then makes it easier to
determine the laws governing capacity of the parties and enforcement of
awards.
4. Problems arise when any of the first three are not expressly provided for in the text
of the contract, because then the tribunals generally rely upon a number of doctrines,
tests and theories to pinpoint the same.

Law Governing the Agreement to Arbitrate /TD/

1. In international commercial arbitration, since the parties or the corporations involved are
from different countries, different laws are applicable for conducting the arbitration in
an effective manner.
2. Arbitration agreement will contain the name of the place where the arbitration will be
conducted so as to make the law of that place relevant to the arbitration.
3. In Naviera Amazonica Peruana SA vs. Compania Internacional de Seguros del
Peru (1988), the Court of Appeal in England summarised the relevant laws applicable
to an arbitration agreement. The laws are as follows:
A. Law governing the agreement to arbitrate, i.e., juridical seat or lex arbitri.
B. Law governing the substantive contract, i.e., an applicable/governing law.
C. Law governing the procedure of the arbitration, i.e., curial law.

4. When the parties do not state the law governing the agreement, the two positions
broadly taken are:
A. the law governing the main contract governs the arbitration agreement; and
B. the law of the seat of the Arbitral Tribunal governs the arbitration agreement
5. The position earlier was more in favour of the seat of the Tribunal, which is now
however slowly changing with time.
6. The UN Working Group which also drafted the UNCITRAL Model Law on International
Commercial Arbitration started with the assertion that when the parties have not
expressly provided for any law to determine the substantive validity of the arbitration
 agreement itself, then the law of the seat of the Arbitral Tribunal must apply for the
same.
7. The same rule can also be inferred from Article 31(3) and Article V(1) of the New
York Convention.
8. The primary rationale behind adopting such a position is because the law of the seat of
the Tribunal has the “real and close” connection with arbitration.
9. The argument of severability of the arbitration agreement from the contract also
added to their favour to argue for two different laws for contract and the arbitration
agreement.
10. Notwithstanding, there have been cases where it has been held by courts from most of
the countries that regardless of where the seat of arbitration is, the law governing the
underlying contract will extend to the arbitration agreement in the absence of an
express choice, since it acts as a tacit choice. This line of argument is to see the
contract as a whole and not in bits and parts.
11. The tension was prevalent in English Law as well.
12. The initial understanding was in favour of adopting the law of the seat of the Tribunal
as the law of the arbitration agreement as well based on the understanding of “real and
close connection” test.
13. This was, however, changed in Sulamérica Cia Nacional de Seguros SA v. Enesa
Engelharia SA that gave primacy to the law of the contract and held that to be the
proper law of the arbitration agreement as well. The same was upheld later by
subsequent cases because the same was taken as an “implied” choice of law in C v.
D.
14. In India as well, there has been confusion with regard to the same, however in a
different order.
15. India initially recognised the principle of extending the law of the underlying contract
to the law of the arbitration agreement through
A. NTPC v. Singer Co., 1992
B. Videocon Industries Ltd. v. Union of India, 2011
C. Yograj Infrastructure Ltd. v. Ssang Yong Engg. & Construction Co Ltd., 2011
16. The line of reasoning adopted by the courts in these cases were similar in that argued
that the contract must be seen as a whole; choice of law of contract creates a
“strong indication of parties’ intention of implied choice; it is rare and exceptional to
have it any other way, etc.
17. However, just along with this model of argument developed its counter that the law of the
seat determines the law applicable to arbitration agreement.
18. In Etsu Chemical Co. Ltd. v. Aksh Optifiber Ltd., 2005, it was recognised that the
closest and real connection would make the seat of the tribunal to be made
applicable
19. In UOI v. Reliance Industries, and Roger Shashuoa v. Mukesh Sharma, the Courts
adopted the arguments of severability of the main contract from the arbitration
agreement and the real and close connection to the arbitration test in essence.
 20. In this context, Bhatia International v. Bulk Trading SA created more confusion by
making Part 1 applicable to almost all international commercial contracts with
some connection to India unless specifically excluded.
21. While Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc. came in to
rectify Bhatia, it referred to the New York Convention and turned down the position to
a “seat-centric” from “contract-centric” approach, which has remained somewhat
constant since then.
22. So, even though India roughly follows a seat-centric approach as of now, the
position regarding the same is still undecided and uncertain.
23. In Sulamérica Cia Nacional de Seguros SA and others v. Enesa Engelharia SA and
others, 2013, the Court came up with a three-tiered step-wise inquiry to be followed
for the determination of the proper law of arbitration agreement setting hierarchy
between the three tests:
A. The express law chosen by the parties; or,
B. The implied law that indicates their choice and intention; or,
C. The law to which there is a real and close connection to the arbitration.
24. .

Law Governing the Arbitration /TD/

1. International Commercial Arbitration is governed by various international conventions
and national laws.
2. A pivotal instrument is the United Nations Commission on International Trade Law
(UNCITRAL) Model law adopted in 1985 and amended in 2006.
3. It assists the countries in updating their laws on arbitral procedure to account for
International Commercial Arbitration.
4. The Model Law covers all stages of the arbitral process, including the
A. Arbitration Agreement,
B. composition and jurisdiction of the arbitral tribunal, and
C. the extent of court intervention.
5. Article 1(2): The provisions of this Law, except articles 8, 9, 17 H, 17 I, 17 J, 35 and 36,
apply only if the place of arbitration is in the territory of this State.

6. In India, the Arbitration and Conciliation Act, 1996 governs the enforcement of
arbitral proceedings regarding the domestic and International Commercial
Arbitration conducted in India as well as the execution of foreign awards.
7. The 1996 Act has two main parts,
A. Part I deals with any arbitration as far as the seat of arbitration is in India.
B. Part II deals with the enforcement of foreign awards mostly.
8. The 1996 Act is mostly based on the UNCITRAL Model Law and the UNCITRAL
Rules 1976.
9. For the enforcement of arbitral awards, there is the United Nations Convention on
the Recognition and Enforcement of Foreign Arbitral Awards, 1958.
A. It is the most successful treaty in private international law.
 B. This Convention shall apply to the recognition and enforcement of arbitral
awards made in the territory of a State other than the State where the
recognition and enforcement of such awards are sought.

10. If enforcement of an arbitral award is required, the New York Convention on the
Recognition and Enforcement of Foreign Arbitral Awards will apply
11. UNCITRAL Model Law works with the New York Convention so that the provisions
on making an enforceable award or asking a court to set it aside or not enforce it, are the
same under the Model Law and the New York Convention.
12. The Model Law does not replace the Convention; it works with it.
13. An award made in a country that is not a signatory to the Convention cannot take
advantage of the Convention to enforce that award in the 169 contracting states
unless there is bilateral recognition, whether or not the arbitration was held under the
provisions of the UNCITRAL Model Law.

14. As a signatory to the Convention on the Recognition and Enforcement of Foreign

Arbitral Awards, also as the “New York Convention” which applies to the recognition
and enforcement of foreign arbitral awards – India has declared the following
reservations about recognizing and enforcing foreign awards in India:
A. India will apply the New York Convention to the recognition and enforcement of
awards made only in the territory of a State, party to the New York
Convention;
B. India will apply the New York Convention only to differences arising out of
legal relationships, whether contractual or not, which are considered
commercial under the law of India.
15.

Law Applicable to the Substance

1. Procedure as to how arbitration has to proceed is regulated by the law of the place
of the arbitration but the law that will deal with the core issues in the dispute will also
have a very important impact on the arbitral process.
2. Therefore, it is imperative to know what choice has been made by the parties.
3. In case the dispute relates to the parties living in the same country, the domestic law
of that country will be the applicable law.
4. In the case of the international commercial contracts, parties from different
countries are involved, moreover, since the choice has to be made by the respective
parties they can choose the national law of the particular country or they can blend
the laws of two countries to regulate their agreement.
5. There may be two or more different national systems of law that may be applicable
and it is also possible that these different national systems may contain contradictory
rules of law on the particular point or points in issue.
6. The usual governing laws are as follows:
 7. Choice of Law in the Arbitration Agreement: The parties can specify the substantive
law that will govern their contractual relationship within the arbitration agreement. This
choice is often respected by arbitral tribunals and courts, provided it is clear and
unambiguous.
8. UNCITRAL Model Law:
A. If the arbitration is conducted under the UNCITRAL Model Law on International
Commercial Arbitration, which many jurisdictions adopt, it allows parties to
determine the applicable law.
B. Article 28 of the Model Law states that the arbitral tribunal shall decide in
accordance with the law chosen by the parties or, in the absence of such a
choice, according to the law with which the dispute has the closest
connection.
9. Conflict of Laws Principles: In cases where no specific law is chosen by the parties,
arbitrators may apply conflict of laws principles to determine which substantive law is
most appropriate based on factors such as:
A. The place of performance of the contract.
B. The location of the parties.
C. The nature of the transaction.
10. Lex Arbitri (Law of the Seat):
A. While primarily governing procedural aspects, the law of the seat can also
influence substantive issues if it incorporates certain principles or rules that
are relevant to international commercial transactions.
11. International Treaties and Conventions: Various international treaties, such as the
New York Convention, may impact how awards are enforced but do not typically
dictate substantive law for disputes.

UNCITRAL model law, 1985 and arb legislation in India: how

effective it has harmonised arbitration legislation in India: not in
syllabus but a midsem Q
1. The Law Commission in its 246th Report recognised the key source of Indian
Arbitration Act, 1996’s text being the UNCITRAL model law on International Commercial
Arbitration.
2. As the UNCITRAL Model law on international commercial arbitration and the UNCITRAL
Arbitration Rules have a functional overlap, the Indian statute has deep linkages with
the Rules as the provisions of the Act were rooted in the Model law
3. UNCITRAL Model Law itself provides a pattern that governments can adopt as a part
of their domestic legislation. It is directed at states.
4. The Act aligns Indian arbitration practices with the UNCITRAL model law.
5. The objective is to
A. modernise and bring consistency to the Arbitration framework in India so that it
could align with global practices.
B. Make India a global centre for arbitration
6. This Model Law was adopted in 1985 and later amended in 2006 so as to meet the
evolving needs of the international community.
7. Through this Model Law, the United Nations General Assembly aimed to instil
proactiveness amongst the countries across the globe towards modernisation of their
respective domestic arbitration-related legal frameworks.
8. It suggested enacting arbitration legislation based on this Model Law.
9. Of course, India was also heavily influenced by this global event. Soon, the Indian
Parliament codified the guidelines of the Model Law on International Commercial
Arbitration in the Arbitration and Conciliation Act, 1996.
10. The Model law, with the exception of a few provisions, was adopted in its entirety in
India in the form of the Arbitration and Conciliation Act, 1996. The following provisions
were adopted by the Act:
A. Form and definition of the arbitration agreement,
B. Duty of the courts to refer parties to arbitration where a suit is brought before
the court in breach of the arbitration agreement,
C. Power of courts and tribunals to provide interim measures of protection in
support of an arbitration agreement,
D. Composition of the arbitral tribunal,
E. Appointing arbitrators,
F. Grounds to challenge an arbitrator,
G. Termination of the mandate of an arbitrator because of his failure to act,
H. Provisions for substitution of an arbitration when his mandate is terminated,
I. Procedure for arbitration,
J. Enforceability of arbitral awards and appeal against them.
11. Part I: This part delineates general provisions governing domestic arbitration. It is very
significant and draws heavily from the UNCITRAL Model Law. It lays the foundation for
arbitration proceedings in India.
12. UOI v. East Coast Boat Builders and Engg Ltd
A. This case investigated the impact of the UNCITRAL Model Law and Rules.
B. The Delhi High Court observed that the Arbitration and Conciliation Act of 1996
does not incorporate every provision of the Model Law and Rules. Although the
Act’s Preamble suggests that it is practical to enact laws on arbitration and
conciliation in accordance with the UNCITRAL Model Law and Rules, what is
enacted as law is what is enforceable in India.
C. If there was a lacuna in the provisions of the Arbitration and Conciliation Act,
1996, and it contained such provisions that may be interpreted in two or more
ways, the Preamble to the Act could be used to interpret those provisions. The
relevant provisions of the UNCITRAL Model Law and Rules could also be used
to interpret such provisions, as they were considered when the Indian 1996 Act
was enacted.

13. Bharat Aluminium Co v. Kaiser Aluminium Technical Service Inc

A. The Indian Arbitration Act has acknowledged the territoriality principle which is
part of the UNCITRAL Model Law.
 B. Part I of the 1996 Act applies to arbitrations held in India, whether they are
between Indian parties or between Indian and foreign parties.
C. However, it does not apply to arbitrations held outside India, regardless of
whether the parties choose to apply the 1996 Act.

14. Limitations:
A. The Act was based on the UNCITRAL Model Law, which was primarily intended
for international commercial arbitration.
B. However, the Act applied similar provisions to domestic arbitration between
Indian nationals, which caused difficulties for purely domestic arbitration.
C. The limited grounds for challenging an award under Section 34 and Section
37 felt insufficient for domestic arbitration cases where arbitrators might not
be well-versed in the law.

15. Harmonisation:
A. The United Nations Commissions on International Trade Law (UNCITRAL)
adopted the Model law on International Commercial Arbitration in 1985.
B. The General Assembly of the United Nations has recommended that all
countries give due consideration to the said Model Law in view of the
desirability of uniformity of the law of arbitral procedures and the specific
needs of international commercial arbitration practice.
C. The UNCITRAL also adopted a set of Conciliation Rules in 1980. The General
Assembly of the United Nations has recommended the use of these Rules in
cases where the disputes arise in the context of international commercial
relations and the parties seek amicable settlement of their disputes by recourse
to conciliation.
D. An important feature of the said UNCITRAL Model Law and Rules is that they
have harmonised concepts on arbitration and conciliation of different legal
systems of the world and thus contain provisions which are designed for
universal application.
E. The UNCITRAL Model Law and Rules, though, are intended to deal with
international commercial arbitration and conciliation; they could, with
appropriate modifications, serve as a model for legislation on domestic
arbitration and conciliation.
F. In India, in order to consolidate and amend the law relating to domestic
arbitration, international commercial arbitration, enforcement of foreign arbitral
awards and to define the law relating to conciliation, taking into account the
Model Law and Conciliation Rules adopted by the UNCITRAL, the President of
India promulgated three ordinances that led to the 1996 Act.
16. Guru Nanak Foundations v Rattan Singh & Sons and Food Corporation of India v
Joginderpal Mohinderpal
A. The Indian Arbitration Act is based on the UNCITRAL Model law 1985 and is the
result of recommendations for reform, particularly concerning improving the
efficiency of the arbitral process.
 17. Preamble of the act:
A. WHEREAS the United Nations Commission on International Trade Law
(UNCITRAL) has adopted the UNCITRAL Model Law on International
Commercial Arbitration in 1985;
B. AND WHEREAS the said Model Law and Rules make significant contribution to
the establishment of a unified legal framework for the fair and efficient settlement
of disputes arising in international commercial relations;
18. UNCITRAL Arbitration Rules provide basic mechanics of conducting arbitration by
giving simple, clear procedural rules that can be applied in an arbitration.
19. Several provisions of UNCITRAL Arbitration Rules are already present in pari materia
form in the A&C Act, 1996.
A. Article 22 of the UNCITRAL Model Law on International Commercial Arbitration
enables the arbitrator to determine the language of the arbitration, subject to
the choice of the parties and hence also in Section 22 of the A&C Act, 1996.
However, not all the rules in the UNCITRAL Arbitration Rules have the same or
similar linkages to the provisions of the A&C Act, 1996.
B. Article 23 of the UNCITRAL Model Law on International Commercial Arbitration,
which merely prescribes that the claimant in its SOC shall state “… facts
supporting his claim, the points at issue and the relief or remedy sought”, where
the details required by Section 23 of the A&C Act, 1996 for SOC and SOD are
"the claimant shall state the facts supporting his claim, the points at issue and the
relief or remedy sought, and the respondent shall state his defense in respect of
these particulars, unless the parties have otherwise agreed as to the required
elements of those statements".
20. .

Discuss in detail the conditions for enforcement of foreign awards

as per Section 48 of the Indian Arbitration Act and with reference
to case laws.
1. S48: Conditions for enforcement of foreign awards:
(1) Enforcement of a foreign award may be refused, at the request of the party
against whom it is invoked, only if that party furnishes to the court proof that
(a) the parties to the agreement referred to in section 44 were, under the law
applicable to them, under some incapacity, or the said agreement is not
valid under the law to which the parties have subjected it or, failing any
indication thereon, under the law of the country where the award was
made; or
(b) the party against whom the award is invoked was not given proper
notice of the appointment of the arbitrator or of the arbitral proceedings
or was otherwise unable to present his case; or
 (c) the award deals with a difference not contemplated by or not falling
within the terms of the submission to arbitration, or it contains decisions
on matters beyond the scope of the submission to arbitration:
- Provided that, if the decisions on matters submitted to arbitration
can be separated from those not so submitted, that part of the
award which contains decisions on matters submitted to
arbitration may be enforced; or
(d) the composition of the arbitral authority or the arbitral procedure was
not in accordance with the agreement of the parties, or, failing such
agreement, was not in accordance with the law of the country where the
arbitration took place; or
(e) the award has not yet become binding on the parties, or has been set
aside or suspended by a competent authority of the country in which, or
under the law of which, that award was made.

(2) Enforcement of an arbitral award may also be refused if the Court finds that—
(a) the subject-matter of the difference is not capable of settlement by
arbitration under the law of India; or
(b) the enforcement of the award would be contrary to the public policy of
India.
Explanation 1: For the avoidance of any doubt, it is clarified that an award
is in conflict with the public policy of India, only if,—
A. (i) the making of the award was induced or affected by fraud or
corruption or was in violation of section 75 or section 81; or
B. (ii) it is in contravention with the fundamental policy of Indian
law; or
C. (iii) it is in conflict with the most basic notions of morality or
justice.
Explanation 2: For the avoidance of doubt, the test as to whether there is
a contravention with the fundamental policy of Indian law shall not entail a
review on the merits of the dispute.

(3) If an application for the setting aside or suspension of the award has been
made to a competent authority referred to in clause (e) of sub-section (1) the
Court may, if it considers it proper, adjourn the decision on the enforcement of
the award and may also, on the application of the party claiming enforcement
of the award, order the other party to give suitable security.

2. The amendments brought in the year 2015 saw significant alterations in Sections 34
and 48 of the Act.
3. While both Sections 34 & 48 of the Act have the same definition of the phrase "public
policy", however, the scope of the ground of "public policy" to challenge a Foreign
Award or a domestic award rendered in an International Commercial Arbitration
having seat in India, differs from those applicable to a domestic award.
4. In an international commercial arbitration held in India, the reasons for challenge under
the ground of public policy would be the same as the ground for refusing to
implement a foreign judgement in India.
5. Pursuant to the amendment of 2015, "patent illegality" grounds appearing on the face
of an award no longer apply to an award rendered in international commercial
arbitration.

6. Vijay Karia & Ors. v. Prysmian Cavi E Sistemi SRL

A. In terms of S48(1) of the Act, the Court can refuse enforcement of a foreign
award only if the party resisting the enforcement furnishes proof to establish the
grounds as set out in Section 48(1) of the Act.
B. However, the court may refuse enforcement of a foreign award notwithstanding
that a party resisting the enforcement has not provided any/sufficient proof of
contravention of public policy.
C. In such cases, the Court is not precluded from examining the question of
public policy suo motu and would refuse to enforce the foreign award that is
found to offend the public policy of India.
D. The approach of the court while examining whether to refuse enforcement of a
foreign award would also depend on the nature of the defence established
E. The scope of inquiry of S48 does not allow for a merits review of foreign arbitral
ruling

7. Campos Brothers Farms v. Matru Bhumi Supply Chain Pvt. Limited and Ors
A. The Court does not have the power to modify the Award in the process of its
enforcement.
B. The only limited power is in the proviso to Section 48(1)(c) of the Act, wherein the
Court may separate the part of the Award which contains a decision on matters
submitted to arbitration from the one which was beyond the scope of the
submission to arbitration, and enforce only that portion of the Award.
C. This clearly shows the limited interference by the court in cases of Foreign
Award.

8. EIG (Mauritius) Limited v. McNally Bharat Engineering Company Limited (Calcutta

High Court)
A. The petitioner filed for the enforcement of a foreign arbitral award against the
respondent. The execution turned into challenges at the floor of Public Policy of
India.
B. The court observed that Section 48, which is placed in Part II of the Act deals
with the conditions of enforcement of certain foreign awards.
C. Under this section of the Act, the onus is placed on the party who would suffer
the consequences of the enforcement.
D. The Ratio Decidendi is as follows:
 E. Firstly, Section 48(1) of the Act lists the grounds too for the refusal, subject to
the party furnishing proof of the ground. The grounds are limited to grounds
mentioned under subsections (a) to (e) of Section 48 of the Act.
F. Secondly, the word "only" preceding the said grounds indicates that the
grounds are limited to only those stated in 48(1) of the Act.
G. Moreover, Section 48(2)(b) of the Act provides for an additional ground where
the enforcement of the award may be refused when such enforcement would be
contrary to the public policy of India.
H. And lastly, Explanations 1 and 2 to 48(2)(b) of the Act narrow down the
threshold for refusal of enforcement even further by restricting the public policy
argument to the three disjunctive conditions thereunder which includes
Explanation 1(ii) where the award is in contravention with the public policy of
Indian law. Explanation 2 further clarifies the restricted domain of refusal of
enforcement of a foreign award by putting the stops on a review on the merits
of the dispute in order to determine whether the award is in contravention of the
fundamental policy of Indian law.
I. In view of the above discussion and reasons, the court rejected the contentions
of the respondent that the enforcement of the award should be refused on the
grounds urged. The court thus found the foreign award enforceable under
Sections 46, 47, and 49 of the Act.

9. The circumstances in simple words are:

A. The parties to the agreement were under some incapacity and/or the agreement
in question is not in accordance with the law to which the parties have subjected
it, or under the law of the country where the award was made.
B. The party against whom the award is invoked was not given proper notice of
the appointment of the arbitrator or of the arbitral proceedings or was otherwise
unable to present his case.
C. The award deals with a difference not contemplated by or not falling within the
terms of the submission to arbitration, or it contains decisions on matters
beyond the scope of the submission to arbitration:
D. Composition of the Arbitral Authority or Procedure was not in conformity with
the agreement of the parties or the law of the land where the arbitration took
place.
E. Award is not binding on the parties or has been set aside by a competent
authority where the award was made.
F. The subject-matter of the difference is not capable of settlement by arbitration
under the law of India
G. The enforcement of the award would be contrary to the public policy of India

10. Essentials for validating foreign awards in India as per S47:

A. Original award or properly authenticated copy as per the laws of the country
where award is rendered
B. Original agreement or certified copy of the ame
 C. Any other evidence to support the foreign award when necessary
11. .

Where procedural law wasn't followed 6m

‌ enland, a water sport park requesting for resolving a dispute with its supplier of water
V
roller coasters named "Fish Roll" on the quality of rollercoasters. During arbitration
proceedings, the tribunal engaged in corruption and passed the award in favour of Fish
Roll. This was made note of only during the enforcement proceedings before the Court
and was also claimed by Venland. How will the court proceed now? 6m

1. S34: Application for setting aside arbitral award

A. S34(2)(b): set aside if court finds that award is in conflict with public policy
B. Explanation 1: conflict if making of the award was affected by corruption
2. S36: if time for setting aside is expired, enforcement of award may be stayed if prima
facie case for corruption is made
3. enforcement of foreign award will be refused only if proved that corruption
A. New york convention: S48: enforcement of foreign award will be refused only if
proved that
(2)(b) contrary to public policy (explanation: corruption)
B. S57: Geneva Conventions
4. .

Mod 4: Nature and Categories of Arbitration

Investment Arbitration
1. Investment arbitration is a mechanism for resolving disputes between foreign investors
and host states
2. It allows investors to seek compensation if a state's actions have adversely
impacted their investments, potentially violating international agreements.

Investment arbitration Commercial arbitration

Parties Foreign investors v. host Private parties

 states

Legal basis Dealt by international Disputes arising out of

treaties and agreements contracts

Public interest Includes matters of public Disputes are private in

policy nature

3. Laws governing investment arbitration:

A. ICSID Convention, 1965: international centre for settlement of investment
disputes
B. UNCITRAL Arbitration Rules, 2021:
- Ad hoc investment arbitration
C. UNCITRAL Rules on transparency in Treaty-based Investor-State
Arbitration, 2013
- The rules require the publication of information such as submissions,
witness statements, expert reports, transcripts, and decisions of the
tribunal.
- The rules apply to investor-state arbitrations initiated under the
UNCITRAL Arbitration Rules for treaties concluded on or after April 1,
2014.
- They also apply to investment treaties concluded before April 1, 2014 if
the parties agree to their application.
- The rules allow tribunals to redact confidential information or hold
private portions of hearings to discuss it.
- Confidential information includes business information, information that
could impede law enforcement, or information protected by the relevant
investment treaty, respondent state law, or other applicable laws.

D. Bilateral and multilateral agreements, such as, North American Free Trade
Agreement
- Between US, Canada and Mexico
- Signed in 1992, effect in 1994
- To eliminate trade barriers and promote trade
- NAFTA immediately lifted tariffs on the majority of goods produced by the
signatory nations.
- Established a free-trade zone in North America;
E.
4. International centre for settlement of investment disputes Convention, 1965:
A. Article 1: The purpose of the Centre shall be to provide facilities for
conciliation and arbitration of investment disputes between Contracting
States and nationals of other Contracting States in accordance with the
provisions of this Convention.
 B. Article 25: The jurisdiction of the Centre shall extend to any legal dispute
arising directly out of an investment, between a Contracting State (or any
constituent subdivision or agency of a Contracting State designated to the
Centre by that State) and a national of another Contracting State, which the
parties to the dispute consent in writing to submit to the Centre. When the
parties have given their consent, no party may withdraw its consent
unilaterally
C. Article 25(1) requires that the dispute must be a “legal dispute arising directly
out of an investment.” The expression “legal dispute” has been used to make
clear that while conflicts of rights are within the jurisdiction of the Centre,
mere conflicts of interests are not.
D. The dispute must concern the existence or scope of a legal right or obligation, or
the nature or extent of the reparation to be made for breach of a legal obligation.
E. Article 18: The Centre shall have full international legal personality. The legal
capacity of the Centre shall include the capacity:
(a) to contract;
(b) to acquire and dispose of movable and immovable property;
(c) to institute legal proceedings.
F. Article 19: To enable the Centre to fulfil its functions, it shall enjoy in the
territories of each Contracting State the immunities and privileges set forth in
this Section.
G. Article 20: The Centre, its property and assets shall enjoy immunity from all
legal process, except when the Centre waives this immunity.

5. Salini v. Morocco: Salini Test for investment:

A. Substantial contribution of money/assets
B. Project of fixed duration
C. Risk assumed in expectation of risk
D. Contribution to economic development of host state
6. Tecmed v. Mexico: fair and equitable treatment is necessary in investment arbitration
7. Philip Morris v. Uruguay: upheld state's rights to regulate for public health
8. Such arbitration balances foreign investments and state sovereignty

Construction Arbitration
1. UNCITRAL Model Law, 1985: The term “commercial” should be given a wide
interpretation so as to cover matters arising from all relationships of a commercial
nature, whether contractual or not. Relationships of a commercial nature include, but
are not limited to, the following transactions: any trade transaction for the supply or
exchange of goods or services; distribution agreement; commercial representation or
agency; factoring; leasing; construction of works; consulting; engineering; licensing;
investment; fi nancing; banking; insurance; exploitation agreement or concession; joint
venture and other forms of industrial or business cooperation; carriage of goods or
passengers by air, sea, rail or road.
2. India does not have specific courts/judges specialising in construction arbitration.
3. However, the Commercial Courts Act, 2015 has established commercial courts and
commercial divisions in a high court having original jurisdiction, which are empowered to
adjudicate commercial disputes including disputes arising out of a construction contract.
4. Further, pursuant to the Specific Relief (Amendment) Act, 2018, certain civil courts are
to be designated as special courts, which will deal with suits filed under the Specific
Relief Act, 1963 in respect of contracts relating to infrastructure projects.
5. However, to date, only a few states like Rajasthan and Karnataka have constituted
special courts for infrastructure projects.

6. A construction contract is a formal agreement that delineates the terms, conditions

and obligations governing the execution of a construction project, typically
involving multiple parties from the public and private sector.
7. A civil construction dispute is invariably a smorgasbord of contentious issues like
A. price escalation,
B. variation in quantities and/or costs,
C. force majeure events and
D. technical hindrances.
8. Given the complex nature of a construction dispute and the claims involved,
arbitration is increasingly becoming the preferred choice of parties as an ADR
mechanism because of the flexibility and effectiveness it offers.
9. However, the arbitrator(s) in such disputes must wear the hat of a legal interpreter,
economist and a mathematician, a vocation few will be envious of.
10. In the recent decision of Satluj Jal Vidyut Nigam v. M/s Jaiprakash Hyundai
Consortium & Ors, the Hon’ble Delhi High Court highlighted the duty of care expected
from arbitrators in complex construction contracts involving mathematical formulae.
The Court navigated through the web of numbers weaved by the parties and concluded
that re-writing of contractual clauses was not allowed at the stage of arbitration.

11. In M/s Divyam Real Estate Pvt. Ltd. v. M/s M2K Entertainment Pvt. Ltd.,
A. The present petition, filed under Section 34 of the Arbitration and Conciliation
Act 1996, seeks to set aside the arbitral award dated 07.03.2012.
B. The dispute originated when the Petitioner breached a contract with the
Respondent, with whom they had an MoU to construct ‘R-3 Mall’ in Ahmedabad,
Gujarat.
C. The Respondent alleged the Petitioner breached the MoU by contracting with a
third party, leading to the Respondent’s contract termination and subsequent
arbitration claim.
D. The Arbitrator directed the Petitioner to pay Rs. 24,54,458/- with 12% annual
interest, covering Rs. 4,54,458/- for advertisement expenses and Rs.
20,00,000/- for ‘loss of profit.’
E. The Petitioner challenged the award, citing a judgment requiring proof of lost
profit opportunities.
 F. The Respondent maintained that the loss calculation was based on market
evaluations, with sufficient evidence supporting the award.
G. Setting aside of arbitration awards on ground being that the learned Arbitrator
did not proceed to on the basis of the evidence on record, that was available
inter alia by way of the evidence tendered before him.
H. The arbitrator cannot award any remittance under the pretext of offering
supplementary reasons or bridging gaps in the rationale, especially when the
award lacks findings on contentious issues.

12. State of U.P. v. Nath Construction

A. Claimant, Nath Constructions awarded the construction contract after the lowest
bid at the state tender.
B. The claimant failed to complete the work within the time frame of 9 months
stipulated in the contract, claiming payment with interest.
C. It was awarded by the sole arbitrator.
D. This was challenged by the State under S34 of the Avt.
E. The arbitration awards cannot be set aside on grounds of erroneous
application of law or by reappreciation of evidence until and unless it suffers from
patent illegality.

13. Conventions:
A. ICSID Convention
- Article 25(2)(a) of the ICSID Convention disqualifies an individual from
being an investor if they are a national of both the home state and the
host state.
B. International Construction Arbitration Conference
- This annual conference is held in London, UK and brings together
construction law practitioners to discuss the most pressing issues in the
field.
C. ICC YAAF conference
- International Chamber of Commerce - Young Arbitration and ADR Forum
(YAAF)
- This online conference was held on May 27, 2021 to discuss construction
disputes in Romania and Moldova.
- The conference included two panel discussions
14. .

Maritime Arbitration
1. Maritime arbitration is a recognised branch of dispute resolution in international trade
and commerce.
2. Maritime affairs to which consensually agreed dispute resolution may apply arise from
the diversity of activity concerning the affairs of the sea:
A. the financing, building, sale and acquisition of ships,
 B. the deployment of ships,
C. the carriage of goods by sea,
D. the insurance of ships, cargo and other marine adventures and
E. the other contractual relationships arising from the use of ships, eg salvage.

3. Historically, London and New York have been the dominant traditional centres of
maritime arbitration.
4. In recent years, Singapore and China have gone to significant lengths to develop
arbitral systems and to encourage the maritime community to use their venues for the
resolution of maritime disputes.
5. The economic growth of the Asia-Pacific region and the consequent increase in
trade flows to the region is being followed by a desire of the maritime community in
that region to resolve their disputes locally.

6. Types of maritime contracts:

A. Charter agreements
- A legal contract that outlines the terms and conditions for hiring a vessel.
There are several types of charter agreements, including:
- Voyage charter: A contract of carriage that involves hiring a vessel to
carry a specific cargo from one port to another
- Time charter: A vessel chartering contract between a vessel owner and a
charterer that outlines the responsibilities of each party
- Bareboat charter: Also known as a Demise Charter Party
B. Ship repair contracts
- Contracts that cover maintenance, modifications, conversions, and
repairs to a ship
C. Seafarer's employment contracts
- Contracts that outline the working conditions, hours, wages, and
facilities for a seafarer
D. Import and export contracts
- Contracts between an importer and an exporter to sell and purchase
goods and commodities
E. Charter party
- Is a legally binding contract between a shipowner and a charterer that
outlines the terms of hiring a ship or yacht for the transportation of cargo
or passengers
F. Bill of Lading
- A legal document that serves as a contract between a shipper and a
carrier, a receipt for the goods, and a document of title
- The BoL is a receipt that confirms the carrier has received the goods.
- The BoL is a document of title that establishes who owns the goods.
G. .
7. The United Nations Convention on the Law of the Sea (UNCLOS) provides for
arbitration as a means to settle disputes.
 8. States Parties can submit disputes to arbitration, the International Tribunal for the
Law of the Sea, or the International Court of Justice.
9. A State may make a declaration choosing one or more of the following means for
settling such disputes:
A. the International Tribunal for the Law of the Sea (ITLOS) in Hamburg, Germany;
B. the International Court of Justice in The Hague, The Netherlands;
C. ad hoc arbitration (in accordance with Annex VII of UNCLOS); or
D. a “special arbitral tribunal” constituted for certain categories of disputes
(established under Annex VIII of UNCLOS).

10. The council for maritime arbitration shall consist of following nominees:
A. Indian Council of Arbitration: 2
B. Ministry of Shipping: 2
C. Ministry of Law & Justice: 1
D. Indian National Shipowners’ Association: 1
E. Shipping Corporation of India: 1
F. New Delhi Shipbrokers’ Association: 1
G. Representative of P & I Correspondents (To be nominated by the President, ICA):
1
H. Representative of Steamer Agents (To be nominated by the President, ICA): 1

11. The Maritime Arbitration Committee shall maintain a panel of Maritime Arbitrators,
who have a stature and reputation in the maritime world as knowledgeable and impartial
persons of integrity and objective approach.
12. Function of Maritime Arbitration Committee
A. empanelling arbitrators
B. providing guidance to arbitrators and parties
C. Determine the scales of arbitrator’s fee, registration fees and administration
charges from time to time
D. Publishing of arbitral award
E. Appointing arbitrators
F. Decide the applicability of these rules in relation to a dispute referred to it
G. Review the progress of cases
13. Maritime arbitration has witnessed great success in the field of arbitration and have
pushed international maritime trade to further progress and prosperity.
14. International Commercial Arbitration is the umbrella under which maritime arbitration lies.
This can be said because it relates to international trade such as transferring money,
goods and services across the borders between private players or between them and
one of the public entities.

Sports Arbitration
1. Sports arbitration can broadly be defined as a method of resolving sport-related disputes
by a final and binding arbitral decision.
2. Presently, arbitration has been firmly established as the predominant method for
resolution of sports disputes, mainly thanks to the uniform practice and abundant,
publicly-available case law of the Court of Arbitration for Sport (the “CAS”), based in
Lausanne, Switzerland, colloquially referred to as the Supreme Court for sports
disputes.
3. It was established in 1984.
4. The CAS has its own set of procedural rules called the “Code of Sports-related
Arbitration and Mediation Rules” (the “CAS Code”).
5. The CAS Code is divided into two main sections.
6. The first part sets out the statutes of the International Council for Arbitration for Sport
(the “ICAS”) and CAS (Articles S1–S26); whereas the second part contains the
Procedural Rules (Articles R27–R70), divided as follows:
A. General Provisions (Section A)
B. Special Provisions Applicable to the Ordinary Arbitration Procedure (Section B)
C. Special Provisions Applicable to the Appeal Arbitration Procedure (Section C)

7. Any arbitrable dispute directly or indirectly linked to sport may be submitted to the
CAS. This is explicitly provided in Article R27 of the CAS Code:
R27 Application of the Rules
A. These Procedural Rules apply whenever the parties have agreed to refer a
sports-related dispute to CAS. Such reference may arise out of an arbitration
clause contained in a contract or regulations or by reason of a later arbitration
agreement (ordinary arbitration proceedings) or may involve an appeal against a
decision rendered by a federation, association or sports-related body where
the statutes or regulations of such bodies, or a specific agreement provide for
an appeal to CAS (appeal arbitration proceedings).
B. Such disputes may involve matters of principle relating to sport or matters of
pecuniary or other interests relating to the practice or the development of
sport and may include, more generally, any activity or matter related or
connected to sport.

8. “Sports-related dispute” is therefore defined very broadly in the CAS Code.

9. In practice, various kinds of sports disputes may be brought to the CAS, from
commercial disputes issues involving
A. sponsorship agreements,
B. media rights,
C. transfer regulations and
D. employment issues
to sport-specific disputes
A. doping,
B. Eligibility,
C. accidents or incidents on the field.
10. The only requirement is that the dispute must be directly or indirectly linked to
sport.
 11. In practice, sport-related disputes overlap with many different areas of law, which is
why certain commentators consider sports law to be an “amalgamation” of various
areas of law.
12. Sports disputes accordingly may involve anything from personality rights, association
law, contract law, tort law, company law, intellectual property law, competition law,
to criminal law and more.
13. The arbitrability of disputes is determined by the CAS ex officio
14. Article R28:
A. The seat of CAS and of each Arbitration Panel (Panel) is Lausanne,
Switzerland.
B. However, should circumstances so warrant, and after consultation with all
parties, the President of the Panel may decide to hold a hearing in another
place and may issue the appropriate directions related to such hearing.

15. Article R45 Law Applicable to the Merits

A. The Panel shall decide the dispute according to the rules of law chosen by the
parties or, in the absence of such a choice, according to Swiss law.
B. The parties may authorise the Panel to decide ex aequo et bono.

16. Conventions
A. Court of Arbitration for Sport (CAS)
- The CAS is an independent body that resolves sports-related disputes
through arbitration or mediation.
- The CAS has three divisions: Ordinary Arbitration, Anti-doping, and
Appeals Arbitration.
- The CAS is located in Lausanne, Switzerland.
B. International Council of Arbitration for Sport (ICAS)
- The ICAS is an administration and financing body that supports the CAS.
- The ICAS is also responsible for facilitating the resolution of
sports-related disputes through arbitration or mediation.
- The ICAS is located in Lausanne, Switzerland.
C.
17. .

IPR Arbitration
1. Recently, arbitration is favoured for dispute resolution of IPR matters which is practised
by entering an arbitration clause while executing the intellectual property contracts.
2. Several changes were made in the IPR regime through Trade-Related Aspects of
Intellectual Property Rights (TRIPS) and Section 89 of Civil Code Procedure which
empowers the Court if it deems fit then to allow for arbitration, mediation and
conciliation of disputes outside the court.
3. Section 134 of Trade Marks Act, 1999 and Section 62 of Copyright Act, 1957 do not
prohibit the IPR matters from referring to arbitration.
4. In India, the arbitrability of subject matter is decided by the test put down in Booz Allen
Case, which was further expanded by several cases.
5. In Booz Allen and Hamilton Inc. v. SBI Home Finance Ltd., the SC held that as we
considered all the disputes generally which are related to ‘rights in personam‘ are
considered to be acceptable for the arbitration. The other ‘right in rem‘ disputes are
not suited for the arbitration, for dealing with such disputes the public tribunals and
courts have given the duty.
6. The principle is not to be followed in a very rigid sense the ‘right in personam‘
disputes which arise from the ‘right in rem‘ can be considered for arbitration.
7. The Bombay High Court in Eros International Media Limited v. Telemax Links India
Pvt. Ltd. held that
A. all disputes which used to arise from the intellectual property rights are not to
be considered ‘right in rem‘ and non-arbitrable.
B. Justice Patel stated that the dispute between two claimants concerning
infringement or pass-off of intellectual property right that action or remedy of
the dispute is always to be considered of ‘right in personam‘ not of ‘right in
rem'
8. Afterwards Bombay High Court in Indian Performing Rights Society (IPRS) Limited v.
Entertainment Network gave distinction between ‘right in rem‘ and ‘right in personam',
relying upon Mundipharma AG v. Wockhardt Limited that the remedies conferred by
law when there is an infringement of right are not considered to be arbitrable.
9. The condition of arbitrability of Intellectual Property disputes is very ambiguous, the
single principle is not existing at present which can clear the picture of matters in
which IPR matters are arbitrable.
10. The Supreme Court through various judgment held that the IPR disputes can be
divided into
A. ‘right in rem‘ - not arbitrable.
B. ‘right in personam' - arbitrable.

11. 1996 Act:

A. Section 7 of the Act states that parties can submit to arbitration of any dispute
which prevails concerning a legal relationship, contractual nature is no bar to
this section as there might be even separate agreement governing arbitration.
B. The premise of Section 35 stipulates that an arbitral award is binding solely
upon the parties to an agreement without giving any mention to the public as
against the powers of judicial courts which can exercise its power to prematurely
decide the civil rights of the third person.
C. Reading down Section 7 and 35 in tandem would uphold the aforementioned
principle that arbitral awards are merely judgment in personam it leads to a
criticism that unlike judicial pronouncement the awards passed by arbitrators
would fail to persuade future disputes in the form of precedents.

12. Another reason for the lack of arbitration in IP disputes is eclectic confidentiality of
arbitral proceeding
 A. Section 42 A of the Act stipulates that the arbitrator, the arbitral institution and
the parties to an arbitration agreement must maintain the confidentiality of
proceedings unless its disclosure is indispensable for the execution of the
award.
B. The public has a right to information about arbitral proceedings where a
dispute is about public interest likewise in case of state being a party to
arbitration the limitation of Section 42 A would be seen as a barrier by virtue of
the facts that affairs of public authorities shall be known to the public

13. IP Conventions that don't talk about arbitration though:

A. WIPO Convention
- The constituent instrument of the World Intellectual Property Organization
(WIPO), which was signed in 1967 and entered into force in 1970.
B. Paris Convention for the Protection of Industrial Property
- A convention that provided for the establishment of an "International
Bureau" in 1886.
C. Berne Convention for the Protection of Literary and Artistic Works
- A convention that provided for the establishment of an "International
Bureau" in 1883.
D. TRIPS Trade-Related Aspects of Intellectual Property Rights
- An agreement that incorporates the substantive obligations of the Paris
Convention and the Berne Convention, and adds additional obligations
14. /

Ad hoc Arbitration
1. A form of arbitration where the parties and the arbitrators independently determine
the procedure without the involvement of an arbitral institution.
2. Ad hoc arbitration is a process where arbitration is not administered by any
institution, requiring the parties involved to determine all aspects of the arbitration,
such as the
A. number of arbitrators,
B. their appointment process and
C. the procedure for conducting the arbitration.
3. The parties must make their own arrangements for selecting arbitrators and
establishing rules, applicable laws, procedures and administrative support.
4. In Ad-hoc arbitration, if the parties are not able to nominate arbitrator/arbitrators by
consent, the appointment of arbitrator is made by the High Court (in case of domestic
arbitration) and by the Supreme Court(in case of international commercial
arbitration).
5. In India, still most of the arbitrations are Ad-Hoc Arbitrations.
6. The arbitration agreement can simply state that “disputes between the parties will be
arbitrated,” along with a designated place of arbitration.
 7. If the parties cannot agree on arbitration details, unresolved issues are determined
by the law of the designated place of arbitration, known as the “seat” of the arbitration.
8. Although ad hoc proceedings are distinct from institutional arbitration, parties can still
designate an institutional provider as the appointing authority or engage one to
administer the arbitration if needed.
9. Parties can include an ad hoc arbitration clause in their contract or negotiate terms of
arbitration after a dispute arises, allowing them to tailor rules and procedures to their
specific needs. However, this approach can be time-consuming, costly and may not
cover all eventualities.
10. Alternatively, parties not requiring specially drawn rules or formal administration can
adapt institutional arbitration rules, incorporate statutory procedures or adopt rules
specifically crafted for ad hoc arbitration, such as the UNCITRAL Rules or CPR
Rules.
11. These options provide flexibility but also come with risks, such as creating ambiguities
in amended institutional rules or adopting clauses not suitable for the current
circumstances or applicable arbitration law.
12. Advantages:
A. more flexible,
B. cost-effective and
C. faster compared to administered proceedings, mainly due to the absence of
administrative fees.
D. Higher confidentiality than institution
E. Sovereignty over the process
F. More control over process - quick resolution
G. Customisation
H. Avoidance of institutional rules

13. Disadvantages:
A. Complexity and uncertainty
B. Lack of administrative support
C. Higher costs if need for expert assistance, causing additional expenses
D. Potential for Delay
E. Limited Enforcement Mechanisms
F. Risk of Inconsistency
G. Need for Cooperation

14. .

Institutional Arbitration
1. In institutional arbitration, the arbitration agreement designates an arbitral institution
to administer the arbitration.
2. The parties then submit their disputes to the institution that intervenes and administers
the arbitral process as per the rules of the institution.
3. The institution does not arbitrate the dispute. It is the arbitral panel which arbitrates the
dispute.
4. The parties may stipulate in the arbitration agreement to refer a dispute between them
for resolution to an institution, such as
A. Singapore international arbitration centre SIAC
B. Hong Kong International Arbitration Centre (HKIAC)
C. Asian International Arbitration Centre (AIAC)
5. It may be preferred if parties do not mind the administrative charges levied by the
institution.
6. The administrative fees are calculated based on the amount of dispute.
7. The administrative structure of the institution adds time and costs that affects the
efficacy of the arbitral process.
8. The rules may also require responses of parties within unrealistic time frames.
9. The rules may cater to one industry and not the prospective needs of one or more
parties.
10. The institution guarantees
A. Constitution of arbitral tribunal
B. Hearings
C. Rendering of award at the end
11. Parties can easily seek help at the discretion of the organisation which knows the
prerequisites.
12. Types of institutional arbitrations:
A. Centre lays rules and conduct for administration
B. Centre provides complete assistance and supervises the whole process under
strict procedural guidelines with great involvement
13. This depends on the Institutional Rules. Ex. SIAC Rules, 2016 states that the arbitration
will be administered by SIAC as per SIAC Rules.
14. Benefits:
A. Established procedural rules for dispute settlement
B. Continued administrative assistance
C. Existing procedural rules for appointment of tribunal
- Will consist of experts in the field
- Contributes to accrual settlement
D. Draft specimen agreement and dispute resolution clause for the parties
- A simple incorporate of the draft would suffice
E. Extraordinary services
- Some offer extraordinary services that act as an asset
F. Accommodate real life circumstances
G. Enhances speed, accuracy and genuineness of proceedings
H. Provides administrators and other staff
- Qualified support is available
- Specialised counsel called “case counsel” of high calibre assists
I. .
15. Cons:
 A. Must pay due attention and evaluate rules before choosing
B. Transfer of certain powers of the parties to the institution
- Independence of parties compromised
C. Additional cost in the form of administrative fees
D. Procedural rules may cause unnecessary delay
E. May change informal characteristic of arbitration to formal
F. Sets unrealistic timelines for parties to respond
16. Institutional Arbitration is a method of arbitration in which the whole proceeding of
arbitration is done by the institution or organisation appointed by the parties in a
contract.
17. India isn’t the choice as the seat for arbitration by the parties due to lack of facilities
and late disposal of cases, therefore the parties prefer International arbitral tribunals
for resolution of disputes.
18. The arbitration agreement specifies how an arbitral institution will be chosen.
19. The parties expressly agree that if a dispute arises within the contract’s term, it will be
resolved by institutional arbitration.
20. The foreign business community prefers these institutions because they have a
A. comprehensive arbitration procedure,
B. an experienced panel of arbitrators and
C. expertise makes for a quick and effective dispute resolution process.
21. In M/S Nandan Biomatrix Limited v D 1 Oils Limited observed that
A. when the parties had expressly decided to settle their disputes by institutional
arbitration rather than ad hoc arbitration then they shall strictly adhere to the
arbitration clause without any exception or derogation.
B. A contract between parties with an arbitration provision designating an
individual as the arbitrator can invoke the jurisdiction of administrative
arbitrations.
C. These organisations follow predetermined rules and protocols when
conducting arbitrations.
22. Benefits:
A. Participation of arbitral institutions in issues relating to the formal structure of
the arbitration, particularly at the beginning of the tribunal, such as the
appointment of arbitrators or the selection of an arbitral role, has proved to be
highly helpful in some situations.
B. It helps in resolving disputes in an efficient manner.
C. If an effective body is situated with experienced arbitrators and proper rules the
institutional arbitration can be made cost-effective and speedier.
D. Institutional arbitration having a predetermined procedure that keeps updating
with the latest development and the arbitrators who are specialised in different
fields will help the parties in the resolution of the dispute.
E. An Institutional Arbitral tribunal will provide efficient governance, flexibility to the
parties, and scrutiny of defects.
23. India:
 A. India is one of the fast-growing economies in the world with the increase in
foreign investment requires to reduce the complexity in procedure and
increase the effectiveness of the system.
B. Established organisations and institutions are needed in our country so that the
arbitration procedure can be conducted with properly established rules and
with the help of professionals.
C. The shift has to be towards Institutional arbitration, there is purpose and need for
the same while dealing with the complex economy which needs structural
adjudication.
D. MCIA is also committed to creating a thriving arbitration environment in India
that benefits all stakeholders involved, including arbitrators, judges, law firms,
central and state governments, businesses, and other clients.
E. In 2016 a committee headed by Justice B.N Krishna was set up for review and
reformation of Institutional Arbitration
- It aimed to identify concerns with the arbitration process and to hear
about the obstacles that have been raised as institutional arbitration has
evolved.
- At the international level, institutional arbitration is preferred by the parties
for resolution of the dispute
- In our country, due to lack of proper structure and lack of faith in
institutions and organisations ad-hoc arbitration method is favoured for
resolution of disputes.
- Subsequently, the New Delhi International Arbitration Bill was also
introduced which got the assent of the president on 26th July 2019.
F. India needs to widen its platform for institutional arbitration because these
entities have modern rules that encourage them to grant parties more leeway.
G. SIAC and HKIAC were greatly aided by their respective governments, which
offered adequate financial and infrastructural support as well as playing an
important role in international promotion; in a similar manner the Indian
Government must try to maintain an adequate standard of arbitration institutions.
H.
24. S6: Administrative assistance:
In order to facilitate the conduct of the arbitral proceedings, the parties, or the arbitral
tribunal with the consent of the parties, may arrange for administrative assistance by
a suitable institution or person.
25. Institutional Arbitration:
A. Institutional arbitration refers to the arbitration procedure undertaken by parties,
in consonance with an arbitration institution.
B. Plenty of popular institutions such as the
- London Court of International Arbitration,
- the ICC institute of Arbitration,
- the International Court of Arbitration,
- Singapore International Arbitration centre,
 - Hong Kong Institute of Arbitration Centre, to name a few, administers
arbitration procedures on a regular basis.
C. Each institute has a set of rules that govern arbitral proceedings conducted by
them, and while parties may be free to choose the substantive laws governing
their arbitration and disputes allied therein, the procedural laws are essentially
governed only by the rules of these institutions.
26. The advantages of institutional arbitration to those who can afford it are apparent.
Foremost are:
A. availability of pre-established rules and procedures which assure that
arbitration will get off the ground and proceed to conclusion with dispatch;
B. administrative assistance from institutions providing a secretariat or court of
arbitration
C. lists of qualified arbitrators, often broken out by fields of expertise;
D. appointment of arbitrators by the institution should the parties request it;
E. physical facilities and support services for arbitrations;
F. assistance in encouraging reluctant parties to proceed with arbitration and
G. an established format with a proven record.
27. The primary disadvantages attending the institutional approach are:
A. administrative fees for services and use of facilities may be high in disputes
over large amounts, especially where fees are related to the amount in dispute.
For lesser amounts in dispute, institutional fees may be greater than the amount
in controversy:
B. the institution's bureaucracy may lead to added costs and delays and
C. the disputants may be required to respond within unrealistic time frames.
28. Clauses may be:
A. Ad hoc
B. Institutional
C. Hybrid: institution appoints arbitrators, other processes are ad hoc
29. S6 assists hybrid clause .
30. .

Fees and Expenses of the Arbitral Tribunal

UNCITRAL Model Law

1. General Silence on Cost Allocation:
A. The 1985 UNCITRAL Model Law does not explicitly address how costs,
including the fees and expenses of the arbitral tribunal, should be allocated
between the parties.
B. This lack of specification allows for flexibility, enabling parties to agree on cost
arrangements in their arbitration agreement or for the arbitral tribunal to
decide based on the circumstances of each case.
2. Discretion of the Arbitral Tribunal:
 A. While the Model Law does not prescribe a specific rule, it grants the arbitral
tribunal discretion in determining how costs are to be handled.
B. This means that arbitrators can consider various factors, such as the
- conduct of the parties during the proceedings and
- relative success of each party,
when deciding on cost allocation.

3. Comparison with Other Rules:

A. In contrast to the Model Law, some arbitration rules, such as those from
UNCITRAL's Arbitration Rules (2021), provide clearer guidance by favoring a
"costs follow the event" principle.
B. This means that generally, the losing party bears the costs of arbitration unless
otherwise agreed by the parties or deemed inappropriate by the tribunal.
4. Types of Costs:
A. Fees and expenses of arbitrators.
B. Administrative fees of any arbitral institution involved.
C. Legal fees incurred by the parties.
D. Costs related to expert witnesses if necessary.
E. Expenses associated with hearings, such as venue costs and transcription
services.
5. Interim Measures and Costs:
A. The Model Law also allows for costs related to interim measures.
B. If a party requests an interim measure that is later determined not to have been
warranted, that party may be liable for any costs or damages incurred by other
parties due to that measure
6. .

ICC Rules, 2021

1. Article 4(4):
A. The claimant along with request for arbitration shall pay the filing fee o
2. Article 37: Advance to cover the costs of the arbitration
(2): As soon as practicable, the Court shall fix the advance on costs in an amount likely
to cover the fees and expenses of the
- arbitrators,
- ICC administrative expenses and
- any other expenses incurred by ICC related to the arbitration for the
claims which have been referred to it by the parties,
unless any claims are made under Article 7 or 8 in which case Article
37(4) shall apply.
The advance on costs fixed by the Court pursuant to this Article 37(2)
shall be payable in equal shares by the claimant and the respondent.

3. Article 38: Decision as to the costs of the arbitration

 (1) The costs of the arbitration shall include the fees and expenses of the
arbitrators and the ICC administrative expenses fixed by the Court, in
accordance with the scales in force at the time of the commencement of the
arbitration, as well as the fees and expenses of any experts appointed by the
arbitral tribunal and the reasonable legal and other costs incurred by the
parties for the arbitration.
(2) The Court may fix the fees of the arbitrators at a figure higher or lower than
that which would result from the application of the relevant scale should this be
deemed necessary due to the exceptional circumstances of the case.
(3) At any time during the arbitral proceedings, the arbitral tribunal may make
decisions on costs, other than those to be fixed by the Court, and order
payment.
(4) The final award shall fix the costs of the arbitration and decide which of the
parties shall bear them or in what proportion they shall be borne by the parties.
(5) In making decisions as to costs, the arbitral tribunal may take into account such
circumstances as it considers relevant, including the extent to which each
party has conducted the arbitration in an expeditious and cost-effective
manner.
(6) In the event of the withdrawal of all claims or the termination of the arbitration
before the rendering of a final award, the Court shall fix the fees and
expenses of the arbitrators and the ICC administrative expenses. If the parties
have not agreed upon the allocation of the costs of the arbitration or other
relevant issues with respect to costs, such matters shall be decided by the
arbitral tribunal. If the arbitral tribunal has not been constituted at the time of
such withdrawal or termination, any party may request the Court to proceed with
the constitution of the arbitral tribunal in accordance with the Rules so that the
arbitral tribunal may make decisions as to costs.

4. Appendix III: Arbitration costs and fees

A. Article 1: Advance on costs
(1) Each request to commence an arbitration pursuant to the Rules must
be accompanied by a filing fee of US$ 5,000. Such payment is
non-refundable and shall be credited to the claimant’s portion of the
advance on costs.
(2) The provisional advance fixed by the Secretary General according to
Article 37(1) of the Rules shall normally not exceed the amount obtained
by adding together the ICC administrative expenses, the minimum of
the fees (as set out in the scales hereinafter) based upon the amount of
the claim and the expected reimbursable expenses of the arbitral
tribunal incurred with respect to the drafting of the Terms of Reference or
the holding of the case management conference. If such amount is not
quantified, the provisional advance shall be fixed at the discretion of
the Secretary General. Payment by the claimant shall be credited to its
share of the advance on costs fixed by the Court.
(3) In general, the arbitral tribunal shall, in accordance with Article 37(6) of
the Rules, proceed only with respect to those claims or counterclaims
in regard to which the whole of the advance on costs has been paid.
(4) The advance on costs fixed by the Court according to Articles 37(2) or
37(4) of the Rules comprises the fees of the arbitrator or arbitrators
(hereinafter referred to as “arbitrator”), any arbitration-related expenses
of the arbitrator and the ICC administrative expenses.
(5) Each party shall pay its share of the total advance on costs in cash.
However, if a party’s share of the advance on costs is greater than US$
500,000 (the “Threshold Amount”), such party may post a bank
guarantee for any amount above the Threshold Amount. The Court may
modify the Threshold Amount at any time at its discretion.
(6) The Secretary General may authorise the payment of advances on
costs, or any party’s share thereof, in instalments, subject to such
conditions as the Court thinks fit.
(7) A party that has already paid in full its share of the advance on costs
fixed by the Court may, in accordance with Article 37(5) of the Rules, pay
the unpaid portion of the advance owed by the defaulting party by
posting a bank guarantee.
(8) When the Court has fixed separate advances on costs pursuant to
Article 37(3) of the Rules, the Secretariat shall invite each party to pay
the amount of the advance corresponding to its respective claim(s).
(9) When, as a result of the fixing of separate advances on costs, the
separate advance fixed for the claim of either party exceeds one half
of such global advance as was previously fixed (in respect of the
same claims and counterclaims that are the subject of separate
advances), a bank guarantee may be posted to cover any such excess
amount. In the event that the amount of the separate advance is
subsequently increased, at least one half of the increase shall be paid
in cash.
(10) The Secretariat shall establish the terms governing all bank
guarantees which the parties may post pursuant to the above provisions.
(11) As provided in Article 37(5) of the Rules, the advance on costs may
be subject to readjustment at any time during the arbitration, in
particular to take into account fluctuations in the amount in dispute,
changes in the amount of the estimated expenses of the arbitrator, or
the evolving difficulty or complexity of arbitration proceedings.
(12) Before any expertise ordered by the arbitral tribunal can be
commenced, the parties, or one of them, shall pay an advance on
costs fixed by the arbitral tribunal sufficient to cover the expected
fees and expenses of the expert as determined by the arbitral tribunal.
The arbitral tribunal shall be responsible for ensuring the payment by
the parties of such fees and expenses.
 (13) The amounts paid as advances on costs do not yield interest for the
parties or the arbitrator.

B. Article 2: Costs and fees

(1) Subject to Article 38(2) of the Rules, the Court shall fix the fees of the
arbitrator in accordance with the scales hereinafter set out or, where the
amount in dispute is not stated, at its discretion.
(2) In setting the arbitrator’s fees, the Court shall take into consideration
the
- diligence and efficiency of the arbitrator,
- the time spent,
- the rapidity of the proceedings,
- the complexity of the dispute and
- the timeliness of the submission of the draft award, so as to
arrive at a figure within the limits specified or, in exceptional
circumstances (Article 38(2) of the Rules), at a figure higher or
lower than those limits.
(3) When a case is submitted to more than one arbitrator, the Court, at its
discretion, shall have the right to increase the total fees up to a
maximum which shall normally not exceed three times the fees of one
arbitrator.
(4) The arbitrator’s fees and expenses shall be fixed exclusively by the
Court as required by the Rules. Separate fee arrangements between
the parties and the arbitrator are contrary to the Rules.
(5) The Court shall fix the ICC administrative expenses of each
arbitration in accordance with the scales hereinafter set out or, where the
amount in dispute is not stated, at its discretion. Where the parties
have agreed upon additional services, or in exceptional
circumstances, the Court may fix the ICC administrative expenses at a
lower or higher figure than that which would result from the application
of such scale, provided that such expenses shall normally not exceed
the maximum amount of the scale.
(6) At any time during the arbitration, the Court may fix as payable a
portion of the ICC administrative expenses corresponding to services
that have already been performed by the Court and the Secretariat.
(7) The Court may require the payment of administrative expenses in
addition to those provided in the scale of administrative expenses as a
condition for holding an arbitration in abeyance at the request of the
parties or of one of them with the acquiescence of the other.
(8) If an arbitration terminates before the rendering of a final award, the
Court shall fix the fees and expenses of the arbitrators and the ICC
administrative expenses at its discretion, taking into account the stage
attained by the arbitral proceedings and any other relevant
circumstances.
 (9) Any amount paid by the parties as an advance on costs exceeding the
costs of the arbitration fixed by the Court shall be reimbursed to the
parties having regard to the amounts paid.
(10) In the case of an application under Articles 36(2) or 36(3) of the
Rules, or of a remission pursuant to Article 36(5) of the Rules, the Court
may fix an advance to cover additional fees and expenses of the arbitral
tribunal and additional ICC administrative expenses and may make the
transmission of such application to the arbitral tribunal subject to the prior
cash payment in full to ICC of such advance. The Court shall fix at its
discretion the costs of the procedure following an application or a
remission, which shall include any possible fees of the arbitrator and ICC
administrative expenses, when approving the decision of the arbitral
tribunal.
(11) The Secretariat may require the payment of administrative expenses
in addition to those provided in the scale of administrative expenses for
any expenses arising in relation to a request pursuant to Article 35(5) of
the Rules.
(12) When an arbitration is preceded by proceedings under the ICC
Mediation Rules, one half of the ICC administrative expenses paid for
such proceedings shall be credited to the ICC administrative expenses
of the arbitration.
(13) Amounts paid to the arbitrator do not include any possible value
added tax (VAT) or other taxes or charges and imposts applicable to the
arbitrator’s fees. Parties have a duty to pay any such taxes or charges;
however, the recovery of any such charges or taxes is a matter solely
between the arbitrator and the parties.
(14) ICC administrative expenses do not include VAT, taxes, imposts
or any other charges of a similar nature. They may be increased by the
amount of VAT, taxes, imposts or any charges of a similar nature at the
prevailing rate. Parties have a duty to pay any such charges pursuant to
invoices issued by ICC.
C.
5. .

S31A, 1996 Act: Expenses and cost in arb:

1. There is no single and specific definition of “cost”.
2. Cost is usually divided into
A. Arbitration cost
B. Legal cost
3. Arbitration cost: cost incurred in arbitrators’ fee, expenses related to proceedings, etc
4. Legal cost: cost incurred in hiring legal representative in proceedings and in the
preparation of legal documents
5. S31A, 1996 Act: Regime of costs
 (1) In relation to any arbitration proceeding or a proceeding under any of the
provisions of this Act pertaining to the arbitration, the Court or arbitral tribunal,
notwithstanding anything contained in the Code of Civil Procedure,1908 (5 of
1908), shall have the discretion to determine—
(a) whether costs are payable by one party to another
(b) the amount of such costs; and
(c) when such costs are to be paid.

Explanation: “costs” means reasonable costs relative to

A. the fees and expenses of the arbitrators, Courts and witnesses
B. legal fees and expenses
C. any administration fees of the institution supervising the arbitration;
and
D. any other expenses incurred in connection with the arbitral or Court
proceedings and the arbitral award.
(2) If the Court or arbitral tribunal decides to make an order as to payment of
costs,—
(a) the general rule is that the unsuccessful party shall be ordered to pay
the costs of the successful party; or
(b) the Court or arbitral tribunal may make a different order for reasons to
be recorded in writing
(3) In determining the costs, the Court or arbitral tribunal shall have regard to all the
circumstances, including—
(a) the conduct of all the parties
(b) whether a party has succeeded partly in the case
(c) whether the party had made a frivolous counterclaim leading to delay
in the disposal of the arbitral proceedings; and
(d) whether any reasonable offer to settle the dispute is made by a party
and refused by the other party
(4) The Court or arbitral tribunal may make any order under this section including
the order that a party shall pay—
(a) a proportion of another party’s costs;
(b) a stated amount in respect of another party’s costs;
(c) costs from or until a certain date only
(d) costs incurred before proceedings have begun
(e) costs relating to particular steps taken in the proceedings
(f) costs relating only to a distinct part of the proceedings; and
(g) interest on costs from or until a certain date.
(5) An agreement which has the effect that a party is to pay the whole or part of
the costs of the arbitration in any event shall be only valid if such agreement is
made after the dispute in question has arisen.
6. Usually, the losing party is ordered to pay the costs of the opposite party.
7. In absence of an award,
A. the cost will be equally borne by both parties
 B. Legal cost will have to borne by respective parties
(S44, Arbitration Act, 2005 of Malaysia)
8. .

Procedure & Evidence - Preliminary Steps

Written Submissions
1. Article 27, ICC Rules: Closing of the proceedings and date for submission of draft
awards
As soon as possible after the last hearing concerning matters to be decided in an
award or the filing of the last authorised submissions concerning such matters,
whichever is later, the arbitral tribunal shall:
(a) declare the proceedings closed with respect to the matters to be decided in the
award; and
(b) inform the Secretariat and the parties of the date by which it expects to submit
its draft award to the Court for approval pursuant to Article 34.
After the proceedings are closed, no further submission or argument may be
made, or evidence produced, with respect to the matters to be decided in the
award, unless requested or authorised by the arbitral tribunal.

2. Appendix IV, ICC Rules

(d) Production of documentary evidence:
- (i) requiring the parties to produce with their submissions the documents on
which they rely;
- (ii) avoiding requests for document production when appropriate in order to
control time and cost;
- (iii) in those cases where requests for document production are considered
appropriate, limiting such requests to documents or categories of documents
that are relevant and material to the outcome of the case;
- (iv) establishing reasonable time limits for the production of documents;
- (v) using a schedule of document production to facilitate the resolution of
issues in relation to the production of documents
(e) Limiting the length and scope of written submissions and written and oral witness
evidence (both fact witnesses and experts) so as to avoid repetition and maintain a
focus on key issues.

3. Appendix VI, Article 3, ICC Rules:

(4) The arbitral tribunal shall have discretion to adopt such procedural measures as it
considers appropriate. In particular, the arbitral tribunal may, after consultation with the
parties, decide not to allow requests for document production or to limit the number,
length and scope of written submissions and written witness evidence (both fact
witnesses and experts)
4. .
Evidence Gathering - UNCITRAL Model law
1. Article 19. Determination of rules of procedure
(1) Subject to the provisions of this Law, the parties are free to agree on the
procedure to be followed by the arbitral tribunal in conducting the proceedings.
(2) Failing such agreement, the arbitral tribunal may, subject to the provisions of
this Law, conduct the arbitration in such manner as it considers appropriate.
The power conferred upon the arbitral tribunal includes the power to
determine the admissibility, relevance, materiality and weight of any
evidence.

2. Article 22. Language

(1) The parties are free to agree on the language or languages to be used in the
arbitral proceedings. Failing such agreement, the arbitral tribunal shall
determine the language or languages to be used in the proceedings. This
agreement or determination, unless otherwise specified therein, shall apply to
any written statement by a party, any hearing and any award, decision or
other communication by the arbitral tribunal.
(2) The arbitral tribunal may order that any documentary evidence shall be
accompanied by a translation into the language or languages agreed upon by
the parties or determined by the arbitral tribunal.

3. Article 27. Court assistance in taking evidence

A. The arbitral tribunal or a party with the approval of the arbitral tribunal may
request from a competent court of this State assistance in taking evidence.
The court may execute the request within its competence and according to its
rules on taking evidence.
4. .

Hearings
1. Article 24. Hearings and written proceedings
(1) Subject to any contrary agreement by the parties, the arbitral tribunal shall
decide whether to hold oral hearings for the presentation of evidence or for
oral argument, or whether the proceedings shall be conducted on the basis of
documents and other materials. However, unless the parties have agreed
that no hearings shall be held, the arbitral tribunal shall hold such hearings at
an appropriate stage of the proceedings, if so requested by a party.
(2) The parties shall be given sufficient advance notice of any hearing and of any
meeting of the arbitral tribunal for the purposes of inspection of goods, other
property or documents.
(3) All statements, documents or other information supplied to the arbitral
tribunal by one party shall be communicated to the other party. Also any
expert report or evidentiary document on which the arbitral tribunal may rely
in making its decision shall be communicated to the parties.
2. Article 20. Place of arbitration
(1) The parties are free to agree on the place of arbitration. Failing such
agreement, the place of arbitration shall be determined by the arbitral tribunal
having regard to the circumstances of the case, including the convenience of
the parties.
(2) Notwithstanding the provisions of paragraph (1) of this article, the arbitral
tribunal may, unless otherwise agreed by the parties, meet at any place it
considers appropriate for consultation among its members, for hearing
witnesses, experts or the parties, or for inspection of goods, other property or
documents.

3. Article 22. Language

(1) The parties are free to agree on the language or languages to be used in the
arbitral proceedings. Failing such agreement, the arbitral tribunal shall
determine the language or languages to be used in the proceedings. This
agreement or determination, unless otherwise specified therein, shall apply to
any written statement by a party, any hearing and any award, decision or other
communication by the arbitral tribunal.
(2) The arbitral tribunal may order that any documentary evidence shall be
accompanied by a translation into the language or languages agreed upon by the
parties or determined by the arbitral tribunal.

4. Article 25. Default of a party

Unless otherwise agreed by the parties, if, without showing sufficient cause,
(a) the claimant fails to communicate his statement of claim in accordance with
article 23(1), the arbitral tribunal shall terminate the proceedings;
(b) the respondent fails to communicate his statement of defence in accordance
with article 23(1), the arbitral tribunal shall continue the proceedings without
treating such failure in itself as an admission of the claimant’s allegations;
(c) any party fails to appear at a hearing or to produce documentary evidence,
the arbitral tribunal may continue the proceedings and make the award on the
evidence before it.
5. In the process of arbitration, there is a hearing conducted to determine the cause of
conflict between the parties by the person who is appointed as an arbitrator by the
parties or by the statutory body.
6. The main purpose of arbitration is adjudication and there is no place to compromise.
7. After determining the cause of conflict and hearing both sides of the parties, the
arbitrator enforces their point of view that is neutral and fair.
Proceedings after the Hearing - Other Matters: Skipping

Mod 5: arbitral award

‌Difference between order and award

1. Not every decision of the tribunal can be deemed an award.
2. Procedural orders like awards are also
A. In writing
B. Sometimes contain reasons
3. However, they are not as authoritative as awards.
4. Order, under S2(14) of CPC, is defined as a formal expression of any decision of a civil
court which is not a decree.
5. Procedural order is merely an administrative decision or response of the tribunal to
an urgent procedural issue,
6. It is final with regards to a particular issue in dispute but does not amount to final
adjudication of the entire dispute on the merits of the case.
7. Slocan Forest Products Ltd v. Skeena Cellulose Inc
A. An arbitrator’s decision as to the admissibility of any evidence during an
arbitration would amount to the procedural ruling and not an award.
8. A procedural order tends to define the conduct of the parties during proceedings.
9. It may also be in the form of certain interim directions given to the parties by the
tribunal.
10. If the parties fail to comply with the order, the tribunal may issue a peremptory order
backed by sanctions to ensure compliance.
11. They facilitate in keeping track of timely progress of the case.
12. They are subject to review and revision anytime by the tribunal.
13. They lack the inherent trait of finality.
14. Whereas an award cannot be amended, reviewed, revised in any way except the
procedure prescribed by law: S35, 1996 Act
15. Enterprise Insurance Co v. U-Drive solutions Ltd:
A. If parties are unhappy with procedural orders, no recourse available to them
B. Recourse available in award
C. Orders are not determinative and do not affect the rights of parties
D. There is no conclusiveness in them.
16. Inforica Inc v. CGI Information Systems and Management Consultants Inc:
A. If every procedural order was challenged, multiplicity of litigation would disrupt
adjudicatory procedure
17. .
Arbitral award, setting aside and the grounds in detail
S31, 33, 34, 35, 36
Chapter VI: making of arbitral award
Chapter VII: setting aside (S34)
1. An arbitration award (or arbitral award) is a determination on the merits by an
arbitration tribunal in arbitration, and is analogous to a judgement in a court of law.
2. The legal requirements relating to the making of awards vary from country to country
and, in some cases, according to the terms of the arbitration agreement.
3. Although in most countries, awards can be oral, this is relatively uncommon and they
are usually delivered in writing.
4. An arbitral award can be monetary or non-monetary
A. Monetary: made for payment of a sum of money from one party to another
B. Non-monetary: no money needs to be paid but includes decisions like stopping a
business practice, increasing unemployment perks and incentives.
5. The following are requirements under the Arbitration Act 1996 which the award must
comply with, unless the parties agree to vary them under section 52 of the Act:
A. The award must be in writing
B. It must be signed by all of the arbitrators making to the award (dissenting
minority arbitrators need not sign unless the parties agree that they must);
C. The award must contain reasons
D. The award must state the "seat" of the arbitration (the place where the
arbitration took place); and
E. The award must state the date upon which it is made.
This is important for determination of time limits and the calculation of interest,etc
6. Requirements for enforcing arbitral awards in India:
Must be an award in a particular form:
A. S31(1): provides, inter alia, that an award shall be
- made in writing and
- be signed by the members of the arbitral tribunal
B. S31(2):
- Proceedings with more than one arbitrator:
- Signature of majority is sufficient provided the reason for any omitted
signature is stated
- After the award, a signed copy is to be delivered to each party
C. S31(3): the arbitral award shall state the reasons upon which it is based unless
- Parties have agreed otherwise
- The award is on agreed terms under S30
D. .
7. Many countries permit the parties to vary the conditions, which reflect the fact that
arbitration is a party-driven process.
8. An arbitration comes into being as a result of an enforceable agreement.
9. An agreement enforceable under law is called a contract.
10. To be enforceable the agreement must be
A. made by free consent of the parties.
B. Not induced by coercion, undue influence, fraud, misrepresentation or mistake as
to a matter of fact essential to the agreement.
C. It is void if a party is a minor or not of sound mind or is disqualified from
contracting by any law to which he is subject.
D. When both the parties to the agreement are under a mutual mistake as to a
matter of fact essential to the agreement, the agreement is void.
E. An arbitration agreement unlawful is void.
F. The consideration of which or object is unlawful if it is forbidden by law
G. It is fraudulent or involves or implies injury to the person or property of another
or the courts regard it as immoral or opposed to public policy.
11. The Arbitration Act provides that an arbitration agreement should be in writing, Hence,
no oral arbitration is possible in India.
12. It is not necessary to constitute the agreement in any single document. It can be spread
over so many documents.
13. Arbitrators are not at liberty to make an award without giving reasons unless it is so
stipulated in the agreement.
14. The powers of the Court to interfere with the awards are now very limited.
15. Application for setting aside:
A. To ascertain the proper conduct of arbitration proceedings, the law allows certain
remedies against an arbitral award
B. An aggrieved party may resort to the law court for setting aside the award

16. Section 34 of the Arbitration Act provides for an application to the Court for setting
aside an award under the following circumstances:-
A. S34(2)(a)(i): Incapacity of party
- If a party to a contract is a minor or unsound who is not represented by a
guardian
- To protect their interest
- S9: appointment of a guardian for arbitration proceedings
B. S34(2)(a)(ii): Invalidity of the agreement
- Where agreement clause is added in a contract, the arbitration will be
invalid if the contract is invalid
C. S34(2)(a)(iii): Want of proper notice:
- If the party was not given proper notice regarding the appointment of
arbitrator or another notice of proceedings, the award may be set aside.
- Dulal Podda v. Executive Engineer, Dona Canal Division: court held
that the appointment of arbitrator on request of appellant without notice to
the respondent and an ex-parte decree will be held illegal and is liable for
setting aside
D. S34(2)(a)(iv): Award deals with disputes not referred to arbitration:
 - If the subject does not come within the jurisdictional ambit of the tribunal,
the award is invalid
E. S34(2)(a)(v): Arbitral tribunal was defective in composition
- If the composition of the tribunal was not in obedience with the agreement
of the parties or if the procedure or conduct of proceedings was not
properly followed
F. S34(2)(b)(i): Subject matter not capable of arbitration
- Matters of criminal nature or concerning public rights
G. S34(b)(ii): Award is in conflict with public policy.
- Award in violation of public policy of India
H.
17. Limitation under S34(3):
A. S34(3) provides that an application to set aside should be made within 3
months from the date on which they received an award
B. If the court is satisfied that the applicant was prevented by sufficient cause, it
may be extended by 30 days only
18. UOI v. Punjab Communication:
A. The amount which was payable by one party was not specified in the award and
the decision was unclear and incapable of being enforced
B. Thus, the award was set aside
19. An award can be enforced as such because it is now equated with a decree of the
Court.
20. A party who wishes to enforce the award can file it before the Court and it will be treated
as a decree unless set aside in an application under section 34.
21. An application for setting aside shall not be made after three months of the receipt
of the award or after three months of an application under section 33 to the arbitration
for any correction of the award.
22. An arbitrator has got the power to file the award and the connected papers in
Court-suo-motu' at any time. There is no period of limitation fixed for it.
23. The arbitrator has to give a signed copy of the award to the parties.
24. After receiving the award the concerned party has to apply to the Court to execute
the award and obtain reliefs.
25. The court will issue notice to the judgement debtor
A. After receipt of notice if the judgement debtor does not appear before Court, ex
parte execution may be ordered granting the relief prayed for in the Petition.
B. If the judgement debtor appears and files an objection, the objection will be
heard and disposed of and only thereafter necessary relief will be granted by
the Court.
C. Under Order XXXI of the Code of Civil Procedure a judgement debtor can be
proceeded against either in person or against his property. Personal execution is
by arresting the judgement debtor.
D. A judgement debtor can be imprisoned for a period of three months.
E. The expenses for this have to be met by the decree holder.
 F. Execution against property is by attaching and selling through Court the saleable
interest of the judgement debtor in the property.
G. If a judgement debtor has no assets, he is safe in spite of a decree against him
as he cannot even be imprisoned for the decree.
H. The procedure for enforcing foreign awards is as per Part II of the present Act
and incorporates the Geneva Convention of 1927 and the New York Convention
of 1958

26. Pursuant to this any person interested in enforcing a foreign award shall apply to a
Court having jurisdiction over the subject matter of the award.
27. The parties seeking to enforce a foreign award must produce:
A. The original award or a duly authenticated copy thereof.
B. Evidence proving that the award has become final and
C. Such evidence is necessary to prove that the award is a foreign award.
28. Types of Arbitration Awards:
A. Interim Award
B. Agreed Award: An agreed award is usually in the form of a settlement between
the parties of their dispute, ie, the equivalent of a judgement by consent. The
settlement is embodied in the form of an award.
C. Reasoned Award: A reasoned award is not a sub-category of award, but is used
to describe an award where the tribunal sets out its reasoning for its decision.
D. Additional Award: An additional award is an award which the tribunal, by its
own initiative or on the application of a party makes in respect of any claim
which was presented to the tribunal but was not resolved under the principal
award.
E. Draft Award: A draft award is not an award as such, and is not binding on the
parties until confirmed by the tribunal
29. .
Categories of Awards

Remedies

Validity of Awards

Effect of Awards

Res Judicata

Decision Making –

Classification of Award

Review of Award

Challenge - Methods of Challenge – Grounds of Challenge

Time Limits and Effects of Challenge.

Recognition and Enforcement

Enforcement under the New York Convention

Enforcement under the Washington Convention

Enforcement under Regional Conventions

Defence of State Immunity - Practical Considerations.

Mod 6: soft laws on arb

General Overview
IBA Guidelines on Conflicts of Interest in International arbitration

IBA Guidelines on Party Representation in International

Arbitration - IBA Rules on the Taking of Evidence in International
Arbitration .

IBA Guidelines for Drafting International Arbitration Clauses

Midsem Notes
Imp Points
1. UNCITRAL Model Law, 1985
United Nations Commission on International Trade Law Model Law on Int Comm Arb.
A. UNCITRAL:
- Recommended for uniformity in international procedures and practice
- Harmonised arbitration of different legal systems - designed for universal
application
- Intended to serve int comm arb and conciliation
- Can be modified for domestic legislations
B. India:
- 3 ordinances to pass the act
- Covers domestic and enforcement of foreign awards
C. Law Commission: 246th report
D. India passed the Act on the suggestion of UNGA to incorporate
E. What has been incorporated:
- Definition of arbitration agreement and form
- Power of courts to refer arb when breaching agreement
- Interim measures by court and tribunal
- Appointment of arbitrators
- Procedure of arb
- Enforceability of award
- Appeal of award
- Terminate of mandate or arbitrator
- Substitution of arbitrator
- Composition of tribunal
- Grounds to challenge an arbitrator
F. Part I dealing with domestic legislations also has roots in model law
G. UOI v. East Coast Boat Builders and Engg Ltd: Preamble suggests to make
laws based on model and can be used to interpret lacunas in the act
H. Bharat Aluminium Co v. Kaiser Aluminium Technical Services
- Indian Act acknowledges the territoriality principle provided in the model
I. Guru Nanak Foundations v. Rattan Singh
- Act is based on Model Law, 1985 improving efficiency of process
J. UNCITRAL is pari materia to Act
- Article 22: arbitrator may determine language subject to choice of parties
- Article 23: both require facts, issue and relief in SOC but Act provides
same for SOD
K. Limitation: the model applied to domestic arb limits grounds for challenging
awards

2. Def of Int Comm Arb:

 A. S2(f): int comm arb is arb arising out of legal relationships deemed commercial
when at least one party is
- National or resident
- Body corporate incorporated
- Association or Body of individuals with central control and management
- Government of foreign
B. TDM Infrastructure v. UE Development India: company dual nationality -
Indian corporation
C. Hybrid: mixes CPC and common law
D. Advantages: faster, easier, cheaper, more confidential, more accessible, less
formal, easier to enforce (NY Convention)

3. S48: Conditions for enforcement of foreign awards:

(1) Refused at the request of a party if proved:
(a) Incapacity of parties/invalidity of agreement in award law
(b) The aggrieved party was not given notice/unable to present case
(c) A difference not contemplated in submissions/beyond the scope
- If separable, those intra vires will be enforced
(d) The composition of authority/procedure not per the agreement/award
law
(e) Not binding/set aside/suspended by award law country
(2) Refused if court finds:
(a) Subject matter not capable of settlement by arb in India
(b) Contrary to public policy
- (fraud, corruption, fundamental policy, conflict with morality or
justice)
- Cannot review on merits of case
(3) If setting aside/suspension pending
- Adjourn decision on enforcement
- If party claims enforcement, ask other party to give security

A. Amended in 2015: no patent illegality

B. Scope of public policy as a ground of challenge different from
domestic award
C. Reasons for challenge under public policy is same as refusing
foreign judgement
D. Vijay Karia v. Prysmian Cavi SRL:
- Refuse enforcement u/s48(1) only if proof
- If public policy, may refuse without sufficient proof
- Court may examine public policy suo moto and refuse
E. Campos Brothers Farms v. Matru Bhumi Supply Chain Ltd
- Court does not have power to modify the award for
enforcement
 - Limited interference as it can only separate enforceable
part from beyond scope
F. EIG (Mauritius) Ltd v. McNally Bharat Engg Co.
- "Only" preceding grounds under S48(1): limited
- Onus of proof on the party that suffers
- S48(2): additional ground of public policy - disjunctive
conditions
- Stops review on merits
G. S47: Essentials for validating foreign awards:
original/authenticated copy as per award law; original/certified
copy of agreement; any other evidence to support foreign award

4. Removal/appointment of arbitrator:
A. TRF Ltd v. Energo Engg Projects Ltd
- If person acting as arbitrator deemed ineligible, cannot nominate an
arbitrator as would amount to running by his choice
- nomination of the arbitrator, the court clarified that the person acting
arbitrator who is himself deemed as ineligible for acting as an arbitrator in
that particular case, cannot nominate an arbitrator in place of himself.
- That would tantamount to running the arbitration as per his choice only
B. Sheetal Maruti Kurundwade v. Metal Power Analytical Ltd
- Presiding officer was counsel for respondent's lawyer previously
- Did not relate to current matter - arbitrator eligible
- There should be sufficient "proximate"relationship
C. S11(8): Appointment of arbitrator - independent and impartial
D. S12(1)(a): grounds for challenge - justifiable doubts on independence and
impartiality

5. Language: S22
A. Determination of language is not a necessity for arb agreement
B. Parties may waive right to determine lang but an indication would be helpful
C. If lang specified in agreement, use that
D. Add to translation costs and loss of time
E. S22: language
(1) Parties free to agree
(2) Failing, tribunal determines
(3) Apply to written statement, hearing, award and other communication
(4) Documentary evidence to be translated
F. Article 22, Model Law - Triple V Inc v. Star (Universal) Co Ltd
G. Videocon Industries v. UOI: if expressly chosen, shall evict doubts based on
seat

6. Equal Treatment of Parties: S18

A. S18: equal treatment of parties
 - Treated with equality
- Full opportunity to present case
B. Non discrimination in arbitral jurisprudence - equity and good conscience
C. Self defence and opportunity to present
D. Article 18, Model Law: free to determine procedural rules and mandatory for full
opportunity to present and treated equally
E. Indus Mobile Distribution Ltd v. Datawind Innovations Ltd
Tribunal not bound by CPC or evidence act, parties free to determine procedure
F. Audi Alteram Partem

7. Award and order

Procedural orders are
A. Administrative decisions or responses by tribunal on urgent procedural issue
B. Not authoritative
C. Not amount to final adjudication of entire dispute
D. Used to define conduct or make interim directions
E. Peremptory orders not backed by sanctions
F. For keeping track of timely progress
G. Subject to amendments, review and revision anytime (S35: award can't be
amended, reviewed or received except by procedure under law)
H. Lacks finality and conclusiveness
I. Enterprise Insurance Co v. U Drive Solutions Ltd
- If unhappy, no recourse for order as available in award
- Orders are not determinative
- Do not affect rights of parties
J. Inforica Inc v. CGI Information Systems and Management Consultants
- If every order challenged: multiplicity and disruption of procedure
K. Slocan Forest Products Ltd v. Skeena Cellulose Inc
- An arbitrator's decision on admissibility of evidence is an order, not ruling

8. Institutional arbitration:
A. Agreement designates arbitral institution to administer the arbitration
B. Rules of the Institution, SIAC Rules, 2016
C. Refer the dispute for resolution to an institution: SIAC, HKIAC, AIAC
D. Administrative charges calculated on amount of dispute
E. Guarantees:
- Constitution of tribunal
- Hearing
- Passing of award
F. Parties can seek help with prerequisites
G. Types:
- Rules and conduct for examination
- Complete assistance, supervision under strict procedural guidelines
H. Benefits:
 - Established procedural rules
- Administrative assistance
- Expert tribunal
- Draft specimen documents to incorporate
- Extraordinary services
- Accommodates real life circumstances
- Speed, accuracy and genuineness of proceedings
- Qualified support staff and specialised "case counsels"
I. Cons:
- Adds time and costs
- Unrealistic time frames
- Caters to one industry
- Must pay due attention and evaluate rules before choosing
- Transfer of parties compromises independence of parties
- Procedural rules may cause delay
- Informal character of arbitration compromised

9. Seat v. Venue in Arbitration: S20

A. Venue: geographical location; Seat: legal jurisdiction
B. Act does not define, uses Place of arb in S20 but commercial agreements use
them
C. Venue: appropriate or convenient geographic location
D. Seat: legal domicile of arbitration
E. Seat determines
- procedural law applicable
- Court that has supervisory jurisdiction
F. Roger Shashoua v. Mukesh Sharma
- Arbitration clause in agreement stated venue is London and agreement
governed by Indian laws
- Wales held that when there is express venue but no designated seat, the
venue will be considered the sear
- Shashoua principle

G. Bharat Aluminium Co v. Kaiser Aluminium Technical Services and Enercon

(India) Ltd v. Enercon Gmbh referred to the Shashoua principle
H. Law Commission recommended in 246th report to define seat as juridical sear
or arb and replace place with seat and venue - not adopted in 2015
I. Indus Mobile Distribution Ltd v. Datawind Innovations Ltd: BALCO referred
to "place" as "juridical seat". Held
- S20(1) and (2) uses "place" to refer to juridical seat
- S20(3) uses "place" to refer to venue
- Unnecessary to incorporate the BALCO judgement into Act as stance is
clear
 10. Expenses and Cost in Arb: S31A
A. No single definition of cost
B. Arb cost and legal cost (legal rep and preparation of legal costs)
C. S31A: Regime of costs
(1) In any arbitration proceeding, court/tribunal has discretion to determine
(a) Whether costs payable by one party to another
(b) Amount
(c) When to pay
Explanation: costs means reasonable costs of
A. Fees and expenses of arbitrators, courts, witnesses
B. Legal fees and expenses
C. Administration fees by institution
D. Any other expenses incurred by proceedings or award
(2) General rule of costs:
(a) Unsuccessful party pays costs of other
(b) Court or tribunal might order differently with reasons written
(3) Court or tribunal shall regard
(a) Conduct of parties
(b) Whether succeeded partly
(c) Frivolous counterclaim to delay
(d) Reasonable offer to settle was refused
(4) May order to pay:
(a) Proportion of other party's costs
(b) Statement amount of other party's costs
(c) Costs from a certain date
(d) Costs before proceedings begun
(e) Costs of steps in proceedings
(f) Cost of a part of proceedings
(g) Interests on costs
(5) Agreement for party to pay whole/part valid only if made after dispute
arose
D. Absence of award: arb cost equal and legal cost respectively (S44, Malaysia)
11. .

UNCITRAL model law, 1985 and arb legislation in

India: how effective it has harmonised arbitration
legislation in India 12m.
1. The Law Commission in its 246th Report recognised the key source of Indian
Arbitration Act, 1996’s text being the UNCITRAL model law on International Commercial
Arbitration.
2. As the UNCITRAL Model law on international commercial arbitration and the UNCITRAL
Arbitration Rules have a functional overlap, the Indian statute has deep linkages with
the Rules as the provisions of the Act were rooted in the Model law
3. UNCITRAL Model Law itself provides a pattern that governments can adopt as a part
of their domestic legislation. It is directed at states.
4. The Act aligns Indian arbitration practices with the UNCITRAL model law.
5. The objective is to
A. modernise and bring consistency to the Arbitration framework in India so that it
could align with global practices.
B. Make India a global centre for arbitration
6. This Model Law was adopted in 1985 and later amended in 2006 so as to meet the
evolving needs of the international community.
7. Through this Model Law, the United Nations General Assembly aimed to instil
proactiveness amongst the countries across the globe towards modernisation of their
respective domestic arbitration-related legal frameworks.
8. It suggested enacting arbitration legislation based on this Model Law.
9. Of course, India was also heavily influenced by this global event. Soon, the Indian
Parliament codified the guidelines of the Model Law on International Commercial
Arbitration in the Arbitration and Conciliation Act, 1996.
10. The Model law, with the exception of a few provisions, was adopted in its entirety in
India in the form of the Arbitration and Conciliation Act, 1996. The following provisions
were adopted by the Act:
A. Form and definition of the arbitration agreement,
B. Duty of the courts to refer parties to arbitration where a suit is brought before
the court in breach of the arbitration agreement,
C. Power of courts and tribunals to provide interim measures of protection in
support of an arbitration agreement,
D. Composition of the arbitral tribunal,
E. Appointing arbitrators,
F. Grounds to challenge an arbitrator,
G. Termination of the mandate of an arbitrator because of his failure to act,
H. Provisions for substitution of an arbitration when his mandate is terminated,
I. Procedure for arbitration,
J. Enforceability of arbitral awards and appeal against them.
11. Part I: This part delineates general provisions governing domestic arbitration. It is very
significant and draws heavily from the UNCITRAL Model Law. It lays the foundation for
arbitration proceedings in India.
12. UOI v. East Coast Boat Builders and Engg Ltd
A. This case investigated the impact of the UNCITRAL Model Law and Rules.
B. The Delhi High Court observed that the Arbitration and Conciliation Act of 1996
does not incorporate every provision of the Model Law and Rules. Although the
Act’s Preamble suggests that it is practical to enact laws on arbitration and
conciliation in accordance with the UNCITRAL Model Law and Rules, what is
enacted as law is what is enforceable in India.
 C. If there was a lacuna in the provisions of the Arbitration and Conciliation Act,
1996, and it contained such provisions that may be interpreted in two or more
ways, the Preamble to the Act could be used to interpret those provisions. The
relevant provisions of the UNCITRAL Model Law and Rules could also be used
to interpret such provisions, as they were considered when the Indian 1996 Act
was enacted.

13. Bharat Aluminium Co v. Kaiser Aluminium Technical Service Inc

A. The Indian Arbitration Act has acknowledged the territoriality principle which is
part of the UNCITRAL Model Law.
B. Part I of the 1996 Act applies to arbitrations held in India, whether they are
between Indian parties or between Indian and foreign parties.
C. However, it does not apply to arbitrations held outside India, regardless of
whether the parties choose to apply the 1996 Act.

14. Limitations:
A. The Act was based on the UNCITRAL Model Law, which was primarily intended
for international commercial arbitration.
B. However, the Act applied similar provisions to domestic arbitration between
Indian nationals, which caused difficulties for purely domestic arbitration.
C. The limited grounds for challenging an award under Section 34 and Section
37 felt insufficient for domestic arbitration cases where arbitrators might not
be well-versed in the law.

15. Harmonisation:
A. The United Nations Commissions on International Trade Law (UNCITRAL)
adopted the Model law on International Commercial Arbitration in 1985.
B. The General Assembly of the United Nations has recommended that all
countries give due consideration to the said Model Law in view of the
desirability of uniformity of the law of arbitral procedures and the specific
needs of international commercial arbitration practice.
C. The UNCITRAL also adopted a set of Conciliation Rules in 1980. The General
Assembly of the United Nations has recommended the use of these Rules in
cases where the disputes arise in the context of international commercial
relations and the parties seek amicable settlement of their disputes by recourse
to conciliation.
D. An important feature of the said UNCITRAL Model Law and Rules is that they
have harmonised concepts on arbitration and conciliation of different legal
systems of the world and thus contain provisions which are designed for
universal application.
E. The UNCITRAL Model Law and Rules, though, are intended to deal with
international commercial arbitration and conciliation; they could, with
appropriate modifications, serve as a model for legislation on domestic
arbitration and conciliation.
 F. In India, in order to consolidate and amend the law relating to domestic
arbitration, international commercial arbitration, enforcement of foreign arbitral
awards and to define the law relating to conciliation, taking into account the
Model Law and Conciliation Rules adopted by the UNCITRAL, the President of
India promulgated three ordinances that led to the 1996 Act.
16. Guru Nanak Foundations v Rattan Singh & Sons and Food Corporation of India v
Joginderpal Mohinderpal
A. The Indian Arbitration Act is based on the UNCITRAL Model law 1985 and is the
result of recommendations for reform, particularly concerning improving the
efficiency of the arbitral process.
17. Preamble of the act:
A. WHEREAS the United Nations Commission on International Trade Law
(UNCITRAL) has adopted the UNCITRAL Model Law on International
Commercial Arbitration in 1985;
B. AND WHEREAS the said Model Law and Rules make significant contribution to
the establishment of a unified legal framework for the fair and efficient settlement
of disputes arising in international commercial relations;
18. UNCITRAL Arbitration Rules provide basic mechanics of conducting arbitration by
giving simple, clear procedural rules that can be applied in an arbitration.
19. Several provisions of UNCITRAL Arbitration Rules are already present in pari materia
form in the A&C Act, 1996.
A. Article 22 of the UNCITRAL Model Law on International Commercial Arbitration
enables the arbitrator to determine the language of the arbitration, subject to
the choice of the parties and hence also in Section 22 of the A&C Act, 1996.
However, not all the rules in the UNCITRAL Arbitration Rules have the same or
similar linkages to the provisions of the A&C Act, 1996.
B. Article 23 of the UNCITRAL Model Law on International Commercial Arbitration,
which merely prescribes that the claimant in its SOC shall state “… facts
supporting his claim, the points at issue and the relief or remedy sought”, where
the details required by Section 23 of the A&C Act, 1996 for SOC and SOD are
"the claimant shall state the facts supporting his claim, the points at issue and the
relief or remedy sought, and the respondent shall state his defense in respect of
these particulars, unless the parties have otherwise agreed as to the required
elements of those statements".
20.
21. .
Analyse the definition and meaning of the term
International and Commercial in International
Commercial Arbitration 12m
1. S2(f): "International commercial arbitration" means an arbitration relating to
disputes arising out of legal relationships, whether contractual or not, considered as
commercial under the law in force in India and where at least one of the parties is
- (i) an individual who is a national of, or habitually resident in, any country other
than India; or
- (ii) a body corporate which is incorporated in any country other than India; or
- (iii) an association or a body of individuals whose central management and
control is exercised in any country other than India; or
- (iv) the Government of a foreign country;

2. Meaning of International:
A. To address global legal disputes effectively and speedily, International Arbitration
helps parties to enter into an arbitration agreement and resolve their disputes
effectively.
3.
4. International Commercial Arbitration helps to resolve disputes among the international
parties arising out of the internal commercial agreements.
5. International Commercial Arbitration is used by the traders of different countries as a
way of settling their business conflicts.
6. The procedure to apply for International Commercial Arbitration is the same as
domestic arbitration.
7. The scope of Section 2(1)(f) of the Arbitration and Conciliation Act was determined by
the Supreme Court in TDM Infrastructure Pvt. Ltd. v. UE Development India Pvt. Ltd.
A. if the company has dual nationality, which means it is registered in foreign and
in India, then that company for this 1996 Act would be regarded as an Indian
corporation and not a foreign corporation.
8. International Commercial Arbitration allows the parties to resolve their disputes amicably
by maintaining their relationship and with less money by respecting each other’s
cultural and linguistic backgrounds.
9. International arbitration is also known as a ‘hybrid form of international dispute
resolution’ because international arbitration allows the mixing of two legal provisions,
i.e.,
A. the Code Civil Law Procedure, 1908, and
B. the Common Law Procedure.
10. The Model arbitration clause of the International Chamber of Commerce (ICC), for
instance, merely reads that all the disputes which arise out of or in connection with the
existing contract shall be settled under the rules of arbitration of the International
Chamber of Commerce by one or more arbitrators as appointed under the said rules.
 11. Advantages:
A. Faster and easier than litigation
B. Less formal and cheaper
C. Accessible to everyone as parties may choose the arbitrator and seat
D. More confidential than court
E. Easier to enforce across borders than court judgements as most countries have
signed the New York Convention on the Recognition and Enforcement of
Arbitral awards.
12. Commercial Arbitration has several defining characteristics:
A. Arbitration is consensual, the parties must agree to arbitrate their differences.
B. Arbitrations are resolved by non-governmental decision makers, arbitrators do
not act as government agents, but private persons selected by the parties.
C. Arbitration produces a definitive and binding award, which is capable of
enforcement through national courts.

13. Justice Vijender Jain: an arbitration relating to a commercial dispute which has at
least one of the parties belonging to a foreign country.
14. There are three ways of establishing the international character of arbitration.
Arbitration may be international because:
A. its subject matter or its procedure or its organisation is international; or
B. the parties involved are connected with different jurisdictions; or
C. there is a combination of both.
15. .

‌ iscuss in detail the conditions for enforcement of

D
foreign awards as per Section 48 of the Indian
Arbitration Act and with reference to case laws. 12m
1. S48: Conditions for enforcement of foreign awards:
(1) Enforcement of a foreign award may be refused, at the request of the party
against whom it is invoked, only if that party furnishes to the court proof that
(a) the parties to the agreement referred to in section 44 were, under the law
applicable to them, under some incapacity, or the said agreement is not
valid under the law to which the parties have subjected it or, failing any
indication thereon, under the law of the country where the award was
made; or
(b) the party against whom the award is invoked was not given proper
notice of the appointment of the arbitrator or of the arbitral proceedings
or was otherwise unable to present his case; or
 (c) the award deals with a difference not contemplated by or not falling
within the terms of the submission to arbitration, or it contains decisions
on matters beyond the scope of the submission to arbitration:
- Provided that, if the decisions on matters submitted to arbitration
can be separated from those not so submitted, that part of the
award which contains decisions on matters submitted to
arbitration may be enforced; or
(d) the composition of the arbitral authority or the arbitral procedure was
not in accordance with the agreement of the parties, or, failing such
agreement, was not in accordance with the law of the country where the
arbitration took place; or
(e) the award has not yet become binding on the parties, or has been set
aside or suspended by a competent authority of the country in which, or
under the law of which, that award was made.

(2) Enforcement of an arbitral award may also be refused if the Court finds that—
(a) the subject-matter of the difference is not capable of settlement by
arbitration under the law of India; or
(b) the enforcement of the award would be contrary to the public policy of
India.
Explanation 1: For the avoidance of any doubt, it is clarified that an award
is in conflict with the public policy of India, only if,—
A. (i) the making of the award was induced or affected by fraud or
corruption or was in violation of section 75 or section 81; or
B. (ii) it is in contravention with the fundamental policy of Indian
law; or
C. (iii) it is in conflict with the most basic notions of morality or
justice.
Explanation 2: For the avoidance of doubt, the test as to whether there is
a contravention with the fundamental policy of Indian law shall not entail a
review on the merits of the dispute.

(3) If an application for the setting aside or suspension of the award has been
made to a competent authority referred to in clause (e) of sub-section (1) the
Court may, if it considers it proper, adjourn the decision on the enforcement of
the award and may also, on the application of the party claiming enforcement
of the award, order the other party to give suitable security.

2. The amendments brought in the year 2015 saw significant alterations in Sections 34
and 48 of the Act.
3. While both Sections 34 & 48 of the Act have the same definition of the phrase "public
policy", however, the scope of the ground of "public policy" to challenge a Foreign
Award or a domestic award rendered in an International Commercial Arbitration
having seat in India, differs from those applicable to a domestic award.
4. In an international commercial arbitration held in India, the reasons for challenge under
the ground of public policy would be the same as the ground for refusing to
implement a foreign judgement in India.
5. Pursuant to the amendment of 2015, "patent illegality" grounds appearing on the face
of an award no longer apply to an award rendered in international commercial
arbitration.

6. Vijay Karia & Ors. v. Prysmian Cavi E Sistemi SRL

A. In terms of S48(1) of the Act, the Court can refuse enforcement of a foreign
award only if the party resisting the enforcement furnishes proof to establish the
grounds as set out in Section 48(1) of the Act.
B. However, the court may refuse enforcement of a foreign award notwithstanding
that a party resisting the enforcement has not provided any/sufficient proof of
contravention of public policy.
C. In such cases, the Court is not precluded from examining the question of
public policy suo motu and would refuse to enforce the foreign award that is
found to offend the public policy of India.
D. The approach of the court while examining whether to refuse enforcement of a
foreign award would also depend on the nature of the defence established
E. The scope of inquiry of S48 does not allow for a merits review of foreign arbitral
ruling

7. Campos Brothers Farms v. Matru Bhumi Supply Chain Pvt. Limited and Ors
A. The Court does not have the power to modify the Award in the process of its
enforcement.
B. The only limited power is in the proviso to Section 48(1)(c) of the Act, wherein the
Court may separate the part of the Award which contains a decision on matters
submitted to arbitration from the one which was beyond the scope of the
submission to arbitration, and enforce only that portion of the Award.
C. This clearly shows the limited interference by the court in cases of Foreign
Award.

8. EIG (Mauritius) Limited v. McNally Bharat Engineering Company Limited (Calcutta

High Court)
A. The petitioner filed for the enforcement of a foreign arbitral award against the
respondent. The execution turned into challenges at the floor of Public Policy of
India.
B. The court observed that Section 48, which is placed in Part II of the Act deals
with the conditions of enforcement of certain foreign awards.
C. Under this section of the Act, the onus is placed on the party who would suffer
the consequences of the enforcement.
D. The Ratio Decidendi is as follows:
 E. Firstly, Section 48(1) of the Act lists the grounds too for the refusal, subject to
the party furnishing proof of the ground. The grounds are limited to grounds
mentioned under subsections (a) to (e) of Section 48 of the Act.
F. Secondly, the word "only" preceding the said grounds indicates that the
grounds are limited to only those stated in 48(1) of the Act.
G. Moreover, Section 48(2)(b) of the Act provides for an additional ground where
the enforcement of the award may be refused when such enforcement would be
contrary to the public policy of India.
H. And lastly, Explanations 1 and 2 to 48(2)(b) of the Act narrow down the
threshold for refusal of enforcement even further by restricting the public policy
argument to the three disjunctive conditions thereunder which includes
Explanation 1(ii) where the award is in contravention with the public policy of
Indian law. Explanation 2 further clarifies the restricted domain of refusal of
enforcement of a foreign award by putting the stops on a review on the merits
of the dispute in order to determine whether the award is in contravention of the
fundamental policy of Indian law.
I. In view of the above discussion and reasons, the court rejected the contentions
of the respondent that the enforcement of the award should be refused on the
grounds urged. The court thus found the foreign award enforceable under
Sections 46, 47, and 49 of the Act.

9. The circumstances in simple words are:

A. The parties to the agreement were under some incapacity and/or the agreement
in question is not in accordance with the law to which the parties have subjected
it, or under the law of the country where the award was made.
B. The party against whom the award is invoked was not given proper notice of
the appointment of the arbitrator or of the arbitral proceedings or was otherwise
unable to present his case.
C. The award deals with a difference not contemplated by or not falling within the
terms of the submission to arbitration, or it contains decisions on matters
beyond the scope of the submission to arbitration:
D. Composition of the Arbitral Authority or Procedure was not in conformity with
the agreement of the parties or the law of the land where the arbitration took
place.
E. Award is not binding on the parties or has been set aside by a competent
authority where the award was made.
F. The subject-matter of the difference is not capable of settlement by arbitration
under the law of India
G. The enforcement of the award would be contrary to the public policy of India

10. Essentials for validating foreign awards in India as per S47:

A. Original award or properly authenticated copy as per the laws of the country
where award is rendered
B. Original agreement or certified copy of the ame
 C. Any other evidence to support the foreign award when necessary
11. .

https://udrc.lkouniv.ac.in/Content/DepartmentContent/SM_ed823d80-1ab4-47b2-8440-9e69bf5a
c72d_30.pdf
https://www.scconline.com/blog/post/2024/04/02/enforcement-of-arbitral-awards-india-analysis-
potential-issues-strategies-for-success/ TD/
Conditions for S48: 7 detailed conditions

Draft an arbitration clause based on the interests of

the party 6m
‌The contracting party namely X and Y intended to agree upon dispute resolution clause
facilitating arbitration in a natural country. Further, they wanted to apply Institutional
arbitration rules to be the applicable procedural law.

Any dispute, controversy, difference or claim arising out of or relating to this

contract, including the existence, validity, interpretation, performance, breach or
termination thereof or any dispute regarding non-contractual obligations arising out of or
relating to it shall be referred to and finally resolved by arbitration administered by
the Singapore International Arbitration Centre under the SIAC Rules, 2016 in force
when the Notice of Arbitration is submitted.

The parties hereby agree as follows:

1. The parties agree to submit their dispute (s), controversy (ies), claim (s), or
difference (s) to arbitration for resolution.
2. The law of this arbitration clause shall be governed by the SIAC Rules, 2016.
3. The seat of arbitration shall be New Delhi ... (India).
4. The number of arbitrators shall be ... (one or three).
5. The Arbitrator(s) shall be nominated/appointed from the panel of Arbitrators of
Indian Dispute Resolution Centre.
6. The arbitration shall be administered by SIAC in accordance with its Rules.
7. The award rendered shall be final and binding on both the parties.
8. The arbitration proceedings shall be conducted in ... (English)"

Where procedural law wasn't followed 6m

‌ enland, a water sport park requesting for resolving a dispute with its supplier of water
V
roller coasters named "Fish Roll" on the quality of rollercoasters. During arbitration
proceedings, the tribunal engaged in corruption and passed the award in favour of Fish
Roll. This was made note of only during the enforcement proceedings before the Court
and was also claimed by Venland. How will the court proceed now? 6m
 1. S34: Application for setting aside arbitral award
A. S34(2)(b): set aside if court finds that award is in conflict with public policy
B. Explanation 1: conflict if making of the award was affected by corruption
2. S36: if time for setting aside is expired, enforcement of award may be stayed if prima
facie case for corruption is made
3. enforcement of foreign award will be refused only if proved that corruption
A. New york convention: S48: enforcement of foreign award will be refused only if
proved that
(2)(b) contrary to public policy (explanation: corruption)
B. S57: Geneva Conventions
4. .

Appointment of arbitrator 6m
‌ arshan Motor vehicle pvt ltd in their dealership dispute with Anu, declares X as a party
D
appointed arbitrator.
Anu appoints Mr.Y as party appointed arbitrator.
X and Y jointly appointed Mr.Z as a presiding arbitrator to the dispute in the proceedings.
W&W pvt ltd, a financial institution known for third party funding for Arbitration funded
Darshan for covering their cost of arbitration.
So Mr.X is a stockholder of W&W on disclosure of the third party information by the
party. Challenging Mr.X and his removal, can it be sustained?

1. TRF Ltd v. Energo Engg Projects Ltd

A. Considering the question on nomination of the arbitrator, the court clarified that
the person acting arbitrator who is himself deemed as ineligible for acting as an
arbitrator in that particular case, cannot nominate an arbitrator in place of himself.
B. That would tantamount to running the arbitration as per his choice only

2. Sheetal Maruti Kurundwade v. Metal Power Analytical Ltd

A. “Independence” and “Impartiality” of the arbitrator was in question on account of
the fact that the presiding arbitrator had been engaged as a counsel for the
respondent’s lawyer in the previous account.
B. However, considering the fact that those previous cases or incidents did not
anyhow relate the current matter, the court upheld the eligibility of the arbitrator.
C. The court held that there should be sufficient “proximate” relationship between
the counsel-arbitrator and the litigant.

3. S11: Appointment of arbitrators: S11(8): independent and impartial

4. S12: Grounds for challenge - S12(1)(a): justifiable doubts to independence and
impartiality
5. https://blog.ipleaders.in/removal-of-an-arbitrator/#:~:text=Once%20an%20arbitrato
r%20is%20appointed,for%20a%20just%20resolution%2C%20or TD/
4m

‌Language in arbitration: S22, 1996 Act

1. Communication between parties is a significant prospect to be considered while setting
disputes.
2. Involvement of parties from different jurisdictions speaking different languages is the
very nature of international arbitration.
3. For the same purpose, language in which the arbitral proceeding is conducted is of
great importance.
4. Determination of the procedural language is not a necessity as far as an arbitration
agreement is concerned.
5. Parties may even waive their right to determine the language.
6. However, an indication of the language in the agreement would be helpful in the
efficient conduct of proceedings.
7. The parties while referring to the dispute for arbitration may use the language specified
in the agreement.
8. Link Trading Joint Stock Co v. Moldova
Thus, even when other parties to arbitrations are from different linguistic backgrounds,
communications shall be made in the language which had been mutually agreed to by
the parties to the agreement.
9. The language clause in an agreement would further help the representatives and the
arbitrator decide on their participation in the proceedings
10. If the arbitrator/representatives are unfamiliar with the language agreed, it would add to
costs such as translation charges for documents.
11. It would lead to loss of time.
12. Article 19, UNCITRAL Arbitration Rules, 2010
A. Upheld in Triple V Inc v. Star (Universal) Co Ltd
B. If the parties are not able to mutually decide on a language, the tribunal shall
decide promptly on the same.
13. Videocon Industries Ltd v. UOI:
A. The specification of language is important as the venue of the proceedings has
its own official languages (in this case, Malaya in Kuala Lumpur)
B. Although the seat chosen might be different, an express determination of
language evicts any doubt that may remain for the future.
14. Choosing the right language yields justice to the proceedings. Thus, parties and
tribunal
A. shall be cautious choosing one
B. Should extend due consideration while deciding
15. The selection of wrong language may lead to unintentional hassles and damage to the
proceedings.
16. The parties can mutually agree upon the language(s) to be used.
17. Failing which, the tribunal shall have complete authority to determine.
 18. S22, 1996 Act: The language shall be used
A. Written statements
B. Hearing
C. Award
D. All formal procedural communications
19. All necessary documents such as documentary evidence shall be accompanied by a
translation to the language decided.
20. S22, Arb Act, 1996:
(1) The parties are free to agree upon the language or languages to be used in the
arbitral proceedings.
(2) Failing any agreement referred to in sub-section (1), the arbitral tribunal shall
determine the language or languages to be used in the arbitral proceedings.
(3) The agreement or determination, unless otherwise specified, shall apply to any
written statement by a party, any hearing and any arbitral award, decision or
other communication by the arbitral tribunal.
(4) The arbitral tribunal may order that any documentary evidence shall be
accompanied by a translation into the language or languages agreed upon by
the parties or determined by the arbitral tribunal.
21. .

‌Equal treatment of parties in arbitration: S18

1. Section 18 of the Act provides for equal treatment of parties.
2. It reads:
The parties shall be treated with equality and each party shall be
given a full opportunity to present this case.
3. Adherence and strict compliance with non-discrimination has always been the basic
notion of arbitral jurisprudence.
4. It is the cornerstone of social justice and is, therefore, the principal aspect of equity and
good conscience.
5. The right of self defence and opportunity to present the case is an extended
imperative power of the parties.
6. Article 18 of the UNCITRAL Model Law recognises the same.
7. The parties are free to selectively determine the procedural rules that apply to arbitral
proceedings.
8. It is mandatory that each party should be given full opportunity to present its case and
shall also be treated equally.
9. Indus Mobile Distribution Ltd v. Datawind Innovations Ltd
The Arbitral Tribunal is not bound by the CPC, 1908 or Evidence Act, 1872 the parties
are free to determine and agree on the procedure to be followed by the tribunal.
10. They are guided by natural justice including Audi Alteram Partem, ie, the right to be
heard.
‌Difference between order and award
1. Not every decision of the tribunal can be deemed an award.
2. Procedural orders like awards are also
A. In writing
B. Sometimes contain reasons
3. However, they are not as authoritative as awards.
4. Order, under S2(14) of CPC, is defined as a formal expression of any decision of a civil
court which is not a decree.
5. Procedural order is merely an administrative decision or response of the tribunal to
an urgent procedural issue,
6. It is final with regards to a particular issue in dispute but does not amount to final
adjudication of the entire dispute on the merits of the case.
7. Slocan Forest Products Ltd v. Skeena Cellulose Inc
A. An arbitrator’s decision as to the admissibility of any evidence during an
arbitration would amount to the procedural ruling and not an award.
8. A procedural order tends to define the conduct of the parties during proceedings.
9. It may also be in the form of certain interim directions given to the parties by the
tribunal.
10. If the parties fail to comply with the order, the tribunal may issue a peremptory order
backed by sanctions to ensure compliance.
11. They facilitate in keeping track of timely progress of the case.
12. They are subject to review and revision anytime by the tribunal.
13. They lack the inherent trait of finality.
14. Whereas an award cannot be amended, reviewed, revised in any way except the
procedure prescribed by law: S35, 1996 Act
15. Enterprise Insurance Co v. U-Drive solutions Ltd:
A. If parties are unhappy with procedural orders, no recourse available to them
B. Recourse available in award
C. Orders are not determinative and do not affect the rights of parties
D. There is no conclusiveness in them.
16. Inforica Inc v. CGI Information Systems and Management Consultants Inc:
A. If every procedural order was challenged, multiplicity of litigation would disrupt
adjudicatory procedure
17. .

‌Institutional arbitration (Pros and cons)

1. In institutional arbitration, the arbitration agreement designates an arbitral institution
to administer the arbitration.
2. The parties then submit their disputes to the institution that intervenes and administers
the arbitral process as per the rules of the institution.
3. The institution does not arbitrate the dispute. It is the arbitral panel which arbitrates the
dispute.
4. The parties may stipulate in the arbitration agreement to refer a dispute between them
for resolution to an institution, such as
A. Singapore international arbitration centre SIAC
B. Hong Kong International Arbitration Centre (HKIAC)
C. Asian International Arbitration Centre (AIAC)
5. It may be preferred if parties do not mind the administrative charges levied by the
institution.
6. The administrative fees are calculated based on the amount of dispute.
7. The administrative structure of the institution adds time and costs that affects the
efficacy of the arbitral process.
8. The rules may also require responses of parties within unrealistic time frames.
9. The rules may cater to one industry and not the prospective needs of one or more
parties.
10. The institution guarantees
A. Constitution of arbitral tribunal
B. Hearings
C. Rendering of award at the end
11. Parties can easily seek help at the discretion of the organisation which knows the
prerequisites.
12. Types of institutional arbitrations:
A. Centre lays rules and conduct for administration
B. Centre provides complete assistance and supervises the whole process under
strict procedural guidelines with great involvement
13. This depends on the Institutional Rules. Ex. SIAC Rules, 2016 states that the arbitration
will be administered by SIAC as per SIAC Rules.
14. Benefits:
A. Established procedural rules for dispute settlement
B. Continued administrative assistance
C. Existing procedural rules for appointment of tribunal
- Will consist of experts in the field
- Contributes to accrual settlement
D. Draft specimen agreement and dispute resolution clause for the parties
- A simple incorporate of the draft would suffice
E. Extraordinary services
- Some offer extraordinary services that act as an asset
F. Accommodate real life circumstances
G. Enhances speed, accuracy and genuineness of proceedings
H. Provides administrators and other staff
- Qualified support is available
- Specialised counsel called “case counsel” of high calibre assists
I. .
15. Cons:
A. Must pay due attention and evaluate rules before choosing
B. Transfer of certain powers of the parties to the institution
 - Independence of parties compromised
C. Additional cost in the form of administrative fees
D. Procedural rules may cause unnecessary delay
E. May change informal characteristic of arbitration to formal
F. Sets unrealistic timelines for parties to respond
16. .

‌Seat v. venue in arbitration: S20

1. While, venue is merely a geographical location where the arbitration is conducted,
seat determines the legal jurisdiction governing the arbitration proceeding.

2. The Arbitration and Conciliation Act, 1996, does not mention the words 'Seat' or
'Venue.' However, these terms are commonly used in commercial agreements instead
of the word 'Place.' Interestingly, the Act does refer to the 'Place of arbitration' under
Section 20, but commercial agreements generally avoid using this term.

3. The 'venue of arbitration' refers to the appropriate or convenient geographic location

where the tribunal conducts its hearings. In contrast, the 'seat of arbitration' serves as
the legal domicile of the arbitration and generally determines the procedural law
applicable to the arbitration proceedings. Additionally, the seat establishes which court
possesses supervisory jurisdiction over the arbitration.

4. In the case of Roger Shashoua v. Mukesh Sharma,

A. The arbitration clause 14.4 stated, 'The venue of the arbitration shall be London,
United Kingdom.'
B. Additionally, under governing clause 17.6, it stated, 'This Agreement shall be
governed by and construed in accordance with the laws of India.'
C. The High Court of Wales had the opportunity to determine the seat of
arbitration in the absence of any express term in the agreement related to the
seat of arbitration.
D. The court held that when there is an express designation of the arbitration
venue and no alternative place is designated as the seat, combined with a
supranational body of rules governing the arbitration and no other significant
contrary indica, then the venue will be considered the seat of arbitration.
E. This principle became known as the Shashoua principle.

5. A Constitutional Bench of five judges of the Supreme Court of India referred to this
principle
A. for the first time in Bharat Aluminium Co. v. Kaiser Aluminium Technical
Services Inc. and
B. subsequently Enercon (India) Ltd. v. Enercon Gmbh.
 6. The Law commission in its 246th report had recommended certain amendments to
the arbitration and conciliation act, 1996 to clear dispel the confusion of venue and seat.
A. Amendment of Section 2
- Insert S2(1)(hh): “seat of the arbitration” means the juridical seat of the
arbitration”
B. Amendment of Section 20
- delete the word “Place” and add the words “Seat and Venue” before the
words “of arbitration”.

7. The recommended amendments were not adopted in Arbitration and Conciliation

(Amendment) Act, 2015.
8. The SC provided the reasoning behind that in Indus Mobile Distribution (P) Ltd. v.
Datawind Innovations (P) Ltd.,
A. The amended Act, does not, however, contain the aforesaid amendments,
presumably because the BALCO judgement in no uncertain terms has referred
to “place” as “juridical seat” for the purpose of Section 2(2) of the Act.
B. It further made it clear that
- Section 20(1) and 20 (2) where the word “place” is used, refers to
“juridical seat”, whereas in
- Section 20 (3), the word “place” is equivalent to “venue”.
C. This being the settled law, it was found unnecessary to expressly incorporate
what the Constitution Bench of the Supreme Court has already done by way of
construction of the Act.

9. The Supreme court in BGS SGS SOMA JV v. NHPC, held that when the 'venue' of
arbitration is specified and no significant contrary indications exist, the designated
'venue' should be considered the 'seat' of the arbitration proceedings."
10. Hence, they are interchangeable unless specifically contradicted.

Expenses and cost in arb: S31A

1. There is no single and specific definition of “cost”.
2. Cost is usually divided into
A. Arbitration cost
B. Legal cost
3. Arbitration cost: cost incurred in arbitrators’ fee, expenses related to proceedings, etc
4. Legal cost: cost incurred in hiring legal representative in proceedings and in the
preparation of legal documents
5. S31A, 1996 Act: Regime of costs
(1) In relation to any arbitration proceeding or a proceeding under any of the
provisions of this Act pertaining to the arbitration, the Court or arbitral tribunal,
notwithstanding anything contained in the Code of Civil Procedure,1908 (5 of
1908), shall have the discretion to determine—
(a) whether costs are payable by one party to another
 (b) the amount of such costs; and
(c) when such costs are to be paid.

Explanation: “costs” means reasonable costs relative to

A. the fees and expenses of the arbitrators, Courts and witnesses
B. legal fees and expenses
C. any administration fees of the institution supervising the arbitration;
and
D. any other expenses incurred in connection with the arbitral or Court
proceedings and the arbitral award.
(2) If the Court or arbitral tribunal decides to make an order as to payment of
costs,—
(a) the general rule is that the unsuccessful party shall be ordered to pay
the costs of the successful party; or
(b) the Court or arbitral tribunal may make a different order for reasons to
be recorded in writing
(3) In determining the costs, the Court or arbitral tribunal shall have regard to all the
circumstances, including—
(a) the conduct of all the parties
(b) whether a party has succeeded partly in the case
(c) whether the party had made a frivolous counterclaim leading to delay
in the disposal of the arbitral proceedings; and
(d) whether any reasonable offer to settle the dispute is made by a party
and refused by the other party
(4) The Court or arbitral tribunal may make any order under this section including
the order that a party shall pay—
(a) a proportion of another party’s costs;
(b) a stated amount in respect of another party’s costs;
(c) costs from or until a certain date only
(d) costs incurred before proceedings have begun
(e) costs relating to particular steps taken in the proceedings
(f) costs relating only to a distinct part of the proceedings; and
(g) interest on costs from or until a certain date.
(5) An agreement which has the effect that a party is to pay the whole or part of
the costs of the arbitration in any event shall be only valid if such agreement is
made after the dispute in question has arisen.
6. Usually, the losing party is ordered to pay the costs of the opposite party.
7. In absence of an award,
A. the cost will be equally borne by both parties
B. Legal cost will have to borne by respective parties
(S44, Arbitration Act, 2005 of Malaysia)
8. .