International Arbitration Law

International commercial arbitration is the process of resolving business disputes among transnational parties through the use of one or more arbitrators rather than through the courts. It requires the agreement of the parties, which is generally given via an arbitration clause inserted into the contract or business agreement.

According to Section 2 (1) (f) of the Arbitration and Conciliation Act, 1996, International Commercial Arbitration means an Arbitration relating to disputes arising out of legal relationship whether contractual or not, considered as commercial under the laws in force in India and where at least one of the party is an individual who is a national of, or habitually resident in, any country other than India, or a body corporate which is incorporated in any country other than India; or a company or an association or a body of individual whose central Management and control is exercised in any country other than India, or the Government of a foreign Country.

Appointment of Arbitrator in International Commercial Arbitration
In case of appointment of sole or third arbitrator in an international commercial Arbitration, the Chief Justice of India or the person or institution designated by him may appoint an arbitrator of a nationality other than the nationalities of the parties, where the parties belong to different nationalities.

Appointment of Substituted Arbitrator
Under section 15(2), where the mandate of an arbitrator terminates, a substituted arbitrator shall be appointed according to the regulations and rules, which were applicable to the appointment of the arbitrator being replaced.

Competence of Arbitral Tribunal to rule on its jurisdiction
Under section 16(1) of the Arbitration and Conciliation Act 1996, the Arbitral Tribunal may rule on its own jurisdiction including ruling on any objections with respect to the validity of arbitration agreement and for that purpose, which forms part of a contract treated as an agreement independent of the other terms of the contract. Under section 16(5) the Arbitral Tribunal shall decide on a plea and the Arbitral Tribunal takes a decision rejecting the plea, he will continue with arbitral proceedings and make an award.

Interim measures by arbitral tribunal
Under section 17(1) of the Arbitration and Conciliation Act 1996, the Arbitral Tribunal at the request of a party, may order a party to take any interim measure of protection. The Arbitral Tribunal may also require a party to provide appropriate security in connection with measure ordered above.

Conduct of Arbitral Proceedings:-Rule of procedure in arbitral proceedings
Under section 19(2) & (3) of the Arbitration and Conciliation Act 1996, the parties are free to agree on procedure to be followed by the Arbitral Tribunal in conducting the arbitral proceedings. Failing any agreements as to procedure to be followed, the Arbitral Tribunal may conduct the proceeding in the manner it considers appropriate.

Commencement of Arbitral Proceeding
Under section 21 of the Arbitration and Conciliation Act 1996, in absence of any agreement, the arbitral proceeding in respect of a particular dispute commence on the date on which a request for that dispute to be referred is received by respondent.

Statement of claims and defence before arbitral tribunal
Under section 23 of the Arbitration and Conciliation Act 1996, the applicant shall state the facts supporting his claim and remedy sought and the Respondent shall state his defence within the time as determined by the Arbitral Tribunal. The parties may submit with their statement all relevant documents to the documents and evidences they will submit. The parties may amend his claims or defence during the course of Arbitral Proceeding and if the Arbitral Tribunal considers it appropriate to allow the amendment or supplement having regard to the delay in making it.

Domestic Arbitral Award – Law applicable
Under section 28 of the Arbitration and Conciliation Act 1996, International Commercial Arbitration and the Arbitral Tribunal shall decide the dispute according to substantive law for the time being in power in India. In all cases the Arbitral Tribunal shall decide in accordance with the terms of contract and shall take into account, the usage of trade applicable to the transaction.

ENFORCEMENT OF FOREIGN AWARDS
Under this Act, enforcement of foreign award is governed by two conventions on foreign awards, namely Geneva Convention awards and New York Convention awards. Section 44 to 52 of the Arbitration and Conciliation Act 1996, deals with the awards made under the New York Convention awards and Section 53 to 60 of the Arbitration and Conciliation Act 1996, deals with awards made under the Geneva Convention awards.

ENFORCEMENT OF AWARD UNDER NEW YORK CONVENTION AWARDS
Section 44 to 52 of the Arbitration and Conciliation Act 1996, deals with enforcement of foreign award made under the New York Convention awards.

FOREIGN AWARD MEANS
According to section 44 of the Arbitration and Conciliation Act 1996, Foreign Award means an arbitral award on differences between persons arising out of legal relationship, considered as commercial under the law in force in India after 11th day of October, 1960, in pursuance of an agreement in writing for arbitration to which this convention applies and in one of such territories, the Central Government being satisfied that reciprocal provisions have been made in Official Gazette declare to be territories to convention applies.

REQUIRED EVIDENCE FOR ENFORCEMENT OF AWARD
The party applying for enforcement of foreign award shall at the time of application produce before Court:-

• Original award or copy thereof duly authenticated in the manner as required by law of country in which it was made.
• Original arbitration agreement or duly certified copy thereof; and
• Such evidence may be necessary to prove that the award is a foreign award and further.