LAW OF ARBITRATION AND MEDIATION NOTES

Module I

What is Arbitration
• Arbitration, a form of alternative dispute resolution, is a way to resolve disputes outside the
judiciary courts. The dispute will be decided by one or more persons, which renders the
'arbitration award'.
• Private dispute resolution?
o Parties get to decide the panel before which they take their dispute to and maintain a degree of
confidentiality. The exercise is limited to the parties and the Tribunal.
• Independent third party? / Trained/
o Parties may appoint judicial members or experts from the respective fields to effectively deal
with their issue.
• Binding decision?
o An arbitral award is considered as binding under the Act as per the provisions of Section 35.
• Autonomous?
o Arbitration is traditionally considered to be autonomous system of dispute resolution. This
does not stay true in India due to excessive interference by the Courts and provisions which
require court aid during the life of the arbitration proceedings.
• Constraints of national laws?
o Yes (enforced country as well as the country where arbitration is conducted).
o The constraints come in two-fold. One, by the country of enforcement of award and two, by
the law of the country where the arbitration is conducted.
• Voluntarily? / Consensual
o Yes. An arbitration agreement is entered voluntarily by the parties. Because at the end,
arbitration agreement is a contract, so an involuntary contract is void.

International Arbitration
• In contemporary legal systems, international commercial arbitration is a means by which
international business disputes can be definitively resolved, pursuant to the parties’ agreement,
by independent, non-governmental decision-makers, selected by or for the parties, applying
neutral adjudicative procedures that provide the parties an opportunity to be heard.

• Contractual forum selection in International transactions:

o “Where, and by whom, will this dispute be decided?” The answer to this question often
decisively affects a dispute’s eventual outcome.
o why the same dispute can have materially different outcomes in different forums –
[National Courts in international disputes]
 o Answer is; Procedural, choice-of-law and substantive legal rules differ dramatically from
one country to another. Other reasons may; inconvenience, local bias and language, may
make a particular forum much more favourable for one party than another. The experience,
competence and integrity of judicial officers also vary substantially among different
forums. Little doubt as to the uneven levels of independence and integrity in many national
judiciaries
o because national legal systems differ profoundly, both parties inevitably seek to ensure
that, if international disputes arise, those disputes are resolved in the forum that is most
favourable to their interests.
• Parties here, prefer to have forum selection clauses:
o Importance of forum selection in the international context, parties to cross-border
commercial transactions very often include dispute resolution provisions in their
agreements.
o selecting a forum in advance, parties are able to mitigate the costs and uncertainties of
international dispute resolution, through the centralization of their disputes in a single
neutral and reliable forum
• contractual dispute resolution provisions typically take one of two basic forms:
(a) forum selection clauses; or (b) arbitration agreements.
• What is International Forum Selection?
o International Forum Selection Agreements Clause-
▪ A forum selection clause is an agreement which either permits or requires its parties to
pursue their claims against one another in a designated national court.
▪ Forum selection agreements can be either “exclusive” (i.e., requiring that all litigation
between the parties be resolved solely in their contractual forum, and nowhere else)
or

▪ “nonexclusive” (i.e., permitting litigation between the parties in their contractual

forum, but not prohibiting substantive claims from being brought in other national
courts which possess jurisdiction).
▪ Once enforced, a forum selection clause will result in litigation in the selected national
court, and will produce (unless settled) a national court judgment.
• What is International Arbitration Agreements?
o the U.S. Supreme Court says, “an agreement to arbitrate before a specialized tribunal [is],
in effect, a specialized kind of forum-selection clause that posits not only the situs of suit
but also the procedure to be used in resolving the dispute.”
• Both, Arbitration (and forum selection of the Court) agreements can be entered into either
before or after a dispute arises.

• Objectives of International Arbitration Agreements

o There are a number of reasons why arbitration is the preferred means of resolving
international commercial disputes.
o An arbitral award, once made, is immediately enforceable both nationally and
internationally in all treaty states.
o confidentiality, procedural flexibility and the choice of arbitrators with particular technical
or legal expertise better suited to grasp the intricacies of the particular dispute or the choice
of law.
o Another crucial factor that cannot be overlooked is the finality of the arbitral process.
o Arbitration is not viewed by commercial persons as simply the first step on a tiresome
ladder of appeals. It is meant to be the first and only step.”
o Neutrality of Dispute Resolution Forum:
▪ parties often begin to negotiate dispute resolution mechanisms with the objective of
ensuring that disputes are resolved in the most favourable forum – from their own
individual perspective – rather than a neutral one. – And it is true.
▪ In many cases, choosing the most favourable forum for a party means choosing the
local courts in that party’s principal place of business. These courts will be convenient
and familiar to the home-town party, and to its regular outside counsel; they will also
probably be somewhat inconvenient and unfamiliar to the counter-party.
▪ an instinctive mistrust of the potential for home-court bias usually prompts parties to
refuse to agree to litigate in their counter-party’s local courts.
▪ In these circumstances, the almost universal reaction for business men and women is
to seek agreement on a suitable neutral forum – a forum for dispute resolution that does
not favour either party, but that will afford each party the opportunity to fairly present
its case to an even-handed and objective tribunal.
▪ An essential aspect of the neutrality of international arbitration is the composition of
the arbitral tribunal.
▪ International arbitration permits the parties to play a substantial role in selecting the
members of the tribunal, including the right to choose a sole or presiding arbitrator
whose nationality is almost always different from that of the parties involved (thus
reducing the risks of national bias, parochial prejudice, or similar partiality).
▪ Another essential feature of the neutrality of international arbitration is the use of
internationally-neutral procedures and rules.
▪ International arbitration seeks to avoid the application of domestic litigation rules and
instead to apply internationally neutral procedures tailored to the parties’ expectations
and needs in particular disputes.
▪ While, national courts apply local procedural rules, which are often designed for
particular judicial frameworks(e.g., a U.S. jury trial or a civil law system that does not
provide for witness testimony, discovery, or cross-examination) and which therefore
are usually unfamiliar to, and often ill-suited for, parties from different legal traditions
o Centralized Dispute Resolution Forum
▪ Another one of the basic objectives, and enduring attractions, of international
arbitration is its ability to avoid the endemic jurisdictional and choice-of-law
difficulties attending international civil litigation.
▪ International transactions inevitably involve parties from, and conduct in, two or more
states. Under contemporary jurisdictional principles, this means that disputes arising
 from such transactions can potentially be resolved in two or more different national
courts. Inevitably, parties will seek to litigate in the forum (or forums) which each
considers most favourable to its individual interests.
▪ One of the central objectives of international arbitration agreements is avoiding
multiplicators’ litigation in different national courts, as well as protracted jurisdictional
disputes, inconsistent decisions and enforcement uncertainties. Instead, international
arbitration offers the promise of a single, centralized dispute resolution mechanism in
one contractual forum.
o Enforceability of Agreements and Awards
▪ One national court put it, modern legal regimes for international arbitration aim, “as a
matter of policy, to adopt a standard which seeks to preserve the autonomy of the forum
selected by the parties and to minimize judicial intervention when reviewing
international commercial arbitral awards.”
▪ And, this aspiration has been largely realized by contemporary international arbitration
conventions and national arbitration legislation.
▪ International arbitration agreements are more readily and more expeditiously enforced,
with fewer exceptions, and more broadly interpreted, in most national courts, than
forum selection clauses.
▪ The comparative enforceability of arbitration agreements is in large part because of the
New York Convention, to which some 164 states are party (as of June 2020), and
because of the existence of national arbitration legislation (increasingly based on the
UNCITRAL Model Law), both of which facilitate the enforceability of international
arbitration agreements.
▪ there are only a few regional arrangements which seek to establish effective
international enforcement regimes for forum selection clauses. The most notable is
Council Regulation No. 44/2001 in the European Union (“EU”), which replaced the
Brussels Convention.
▪ Additionally, many states impose limitations on the enforceability of forum selection
clauses, such as requiring a “reasonable relationship” between the parties’ contract and
the forum or considering ‘forum non convenient’ objections to the parties’ contractual
forum.
▪ Similarly, “public policy” or “mandatory law” limitations on forum selection
mechanisms are usually less significant obstacles to enforcing arbitration agreements
than forum selection clauses. For these reasons, international arbitration agreements
are often substantially more enforceable than forum selection clauses.
▪ Still, the Hague Conference on Private International Law’s Convention on ‘Choice of
Court Agreements’ would provide more uniform international standards governing the
enforcement of forum selection agreements – if it were ratified by significant numbers
of states. That has not occurred, despite conclusion of the Convention in June 2005.
▪ Given the serious questions regarding the integrity, competence and efficiency of
national courts in many jurisdictions, it is doubtful that significant numbers of states
will (or should) ratify the ‘Choice of Court Convention’.
 ▪ So, agreements to arbitrate, international arbitral awards enjoy the protection of the
New York Convention, as well unfavourable arbitration legislation in many countries.
▪ These instruments provide a “pro-enforcement” regime, with expedited recognition
procedures and only limited grounds for denying recognition to an arbitral award.
▪ In contrast, there are only a few regional arrangements for the enforcement of foreign
judgments (in particular, Council Regulation 44/2001 in Europe), and there is no global
counterpart to the New York Convention for foreign judgments.
▪ Some major trading states, including the United States, are party to no bilateral or
multilateral agreement on the enforceability of foreign judgments.
▪ In the absence of international treaties, the recognition of foreign judgments in many
nations is subject to local law, which often makes it difficult or impossible to obtain
effective enforcement.
o Commercial Competence and Expertise of Tribunal
▪ It is fundamental in most national legal traditions that judges are selected randomly for
assignment to particular cases, regardless of their experience or aptitude in the
underlying matter.
▪ Judges are ordinarily generalists, often without any specialization in complex
commercial matters, much less a particular type of transaction (M&A, joint venture) or
industry (oil and gas, insurance). These considerations inevitably affect the efficiency,
and the quality, of the dispute resolution process.
▪ One anonymous respondent to a survey of international arbitration users -
▪ “for a French party, the big advantage is that international commercial arbitration offers
‘de luxe justice’ … instead of having a $600 million dispute before the Commercial
Court in Paris, where each party has only one hour for pleadings and where you can’t
present witnesses and have no discovery;
▪ for a dispute of that importance it may well be worth the costs to get a type of justice
that is more international and more ‘luxurious’; what you get is more extensive and
thorough examination of witness testimony – without the excesses of American court
procedure.”
o Finality of Decisions
▪ Another salient feature of international commercial arbitration is the absence, in most
cases, of extensive appellate review of arbitral awards.
▪ Judicial review of awards in most developed countries is narrowly confined to issues
of procedural fairness, jurisdiction and public policy. [Now in India too]
▪ However, on the other hand, it also means that a wildly eccentric, or simply wrong,
arbitral decision cannot readily be corrected.
▪ Still, evidence and empirical research indicate that business users ordinarily consider
the efficiency and finality of arbitral procedures favourably, even at the expense of
foregoing appellate rights.
o Party Autonomy and Procedural Flexibility
▪ the principal reasons that this procedural autonomy is recognized into enable the
parties and arbitrators to dispense with the technical formalities and procedures of
 national court proceedings and instead to fashion procedures tailored to particular
disputes.
▪ Thus, technically-complex disputes can include specialized procedures for testing and
presenting expert evidence, or “fast track” procedures can be adopted where time is of
the essence, or tailor-made dispute resolution mechanisms can be adopted in particular
commercial markets(e.g., sports, commodities or construction arbitrations).
▪ More generally, parties are typically free to agree upon the existence and scope of
discovery or disclosure, the modes for presentation of fact and expert evidence, the
length of the hearing, the format of site inspections, the timetable of the arbitration
and other matters.
▪ An essential aspect of the international arbitral process, reflecting both commercial
parties’ desire for expertise and the exercise of their autonomy, involves the use of
specialized arbitral rules in particular markets.
▪ Thus, specially-tailored arbitral institutions exist in the fields of maritime and salvage,
commodities, insurance and reinsurance, transportation, intellectual property,
construction, and labour and employment disputes.
▪ In each case, specialized procedural rules, required or optional lists of arbitrators and
other contractual provisions structure the arbitral process in order to provide users with
the maximum degree of specialized expertise and procedural predictability, efficiency
and security.
o Efficiency and Economy
▪ “[t]he purpose of arbitration is to permit relatively quick and inexpensive resolution
of contractual disputes by avoiding the expense and delay of extended court
proceedings.”
▪ In reality, both international arbitration and international litigation can involve
significant expense and delay, and it is unwise to make sweeping generalizations about
which mechanism is necessarily quicker or cheaper in all cases.
▪ This is particularly true in major international disputes, which can involve claims for
billions of dollars or Euro (or more), and complex factual and legal issues.
▪ This is because, disputes of this character often require very substantial written
submissions, factual and expert evidence, and lengthy hearings, with the attendant
costs
▪ In international arbitration, the parties are required (subject to later allocation of
arbitration costs by the tribunal) to pay the fees of the arbitrator(s) and, usually, an
arbitral institution. The parties will also have to pay the logistical expenses of renting
hearing rooms, travel to the arbitral situs, lodging and the like. This entails expenses
that may not exist in national court litigation.
▪ The additional expenses of arbitration will often pale in comparison with the costs of
legal representation if there are parallel or multiplicities proceedings in national
courts. This can be the case where the parties have, for whatever reason, not agreed
upon an exclusive forum selection clause, or where such a clause is held unenforceable
or inapplicable.
 ▪ A number of leading arbitral institutions have adopted fast-track or expedited
procedures for small-value disputes and disputes requiring urgent disposition. These
mechanisms permit resolution of disputes in a matter of months, typically by a sole
arbitrator in expedited proceedings.
▪ Similarly, a number of arbitral institutions provide for early dismissal of claims or
defences – again materially expediting the arbitral process.
▪ larger commercial disputes often require between 18 and 36 months to reach a final
award, with only limited possibilities for earlier summary dispositions.
▪ In many jurisdictions, national court proceedings are subject to at least equally
significant delays. Judicial dockets in many countries are overburdened and obtaining
a trial date and final decision may take years or longer; that is true even in states with
reasonably well-funded judicial systems, while delays are substantially longer in states
with budgetary or other endemic organizational deficiencies.
o Confidentiality and Privacy of Dispute Resolution Process
▪ This serves to prevent aggravation of the parties’ dispute, to limit any collateral
damage of a dispute and to focus the parties’ energies on an amicable, business-like
resolution of their disagreements.
▪ However, Public disclosure can encourage efforts at “trial by press release” and may
impede negotiated compromises, by hardening positions, fuelling emotions, or
provoking collateral disputes and damage.
▪ In arbitration, in a number of jurisdictions, confidentiality obligations are implied into
international arbitration agreements as a matter of law, while some institutional
arbitration rules impose such duties expressly.
▪ However, Nonetheless, there is no clear duty of confidentiality in arbitral proceedings
in many jurisdictions and, even where such obligations exist, they are subject to
exceptions which have the effect that awards are sometimes made public, either in
enforcement actions or otherwise.
▪ commercial parties sometimes affirmatively desire that certain dispute and their
outcomes be made public.
▪ Where a company has a standard form contract, used with numerous counter-parties,
it may want interpretations of the contract to become publicly-known, and binding
through precedent, as widely as possible. Where that is the case, parties are of course
free to agree that their arbitral proceedings (or the awards) will be public; in practice,
this occurs in some commercial settings.
▪ There have also been proposals for greater transparency in international commercial
arbitration, although they have been much more limited than those in investment
arbitration.
o Facilitation of Amicable Settlement
▪ The arbitral process does present parties with opportunities for both procedural
cooperation and more general settlement discussions.
▪ Approached constructively, these opportunities can be used to pursue a negotiated
resolution, at least where parties are so inclined, and remain a material (if uncertain)
objective of the international arbitral process.
 o Disputes Involving States and State Entities
▪ By agreeing to international arbitration, a state or state entity ordinarily waives its
sovereign immunity from enforcement of the arbitration agreement and recognition of
any resulting award; execution of the award against state assets often requires a
separate (and specific) waiver of immunity, but awards are generally more readily
enforceable against state assets than national court judgments.
▪ In practice, many states and state-related entities must accept international arbitration
as a necessary condition to concluding significant international business transactions:
unless the state accepts international arbitration, it will not be able to conclude
commercial arrangements, at least not with serious counter-parties.

Overview of Contemporary Legal framework for International Commercial Arbitration

I. NEW YORK CONVENTION
• Success of New York Convention:
o The Convention established for the first time a comprehensive international legal
framework for international arbitration agreements, arbitral proceedings and arbitral
awards.
o Considering only the Convention’s provisions mandating recognition of arbitral awards,
subject to a limited, exclusive list of exceptions,
o Convention's introduction of uniform international legal standards mandatorily requiring
the recognition and enforcement of international arbitration agreements, subject to only
specified exceptions, was also a bold advance, as was the Convention’s emphatic
recognition of the predominant role of party autonomy in the arbitral process.
o Taken together, the Convention’s provisions regarding the recognition of arbitral awards
and agreements provided an international legal framework within which the arbitral
proceedings could be conducted largely in accordance with the parties’ desires and the
arbitrators’ directions, and whose results could be effectively enforced in national courts
around the world.
• Overview of New York Convention’s Provisions
o the Convention’s provisions focused on the recognition and enforcement of arbitration
agreements and arbitral awards, without specifically regulating the conduct of the arbitral
proceedings or other aspects of the arbitral process.
o Taken together, the Convention’s provisions set forth binding international legal principles
governing the entire arbitral process – including the recognition of arbitration agreements,
the conduct of the arbitral process and the recognition of arbitral awards.
o The significance of the New York Convention for international commercial arbitration
makes it even more important that the Convention is interpreted uniformly by the courts.
o In particular, the Convention’s provisions prescribe uniform international rules that:
(a) require national courts to recognize the presumptive validity of international arbitration
agreements, subject to specified exceptions (Article II(1));
(b) require national courts to refer parties to arbitration when they have entered into a valid
agreement to arbitrate that is subject to the Convention (Article II(3)); and
 (c) require national courts to recognize and enforce foreign arbitral awards(Articles III and
IV), subject to a limited number of specified exceptions(Article V). Additionally, Articles
II and V(1)
(d) also indirectly govern the arbitral process itself, generally according decisive weight to
the parties’ agreements regarding arbitral procedures(rather than the law of the arbitral
seat)
o National courts have consistently held that these provisions of the Convention establish a
“pro-enforcement” or “pro-arbitration” regime for international arbitration agreements and
arbitral awards.
o This basic rule is elaborated, and also provided an enforcement mechanism, in Article II(3)
of the Convention, which requires the courts of Contracting States to refer parties to
international arbitration agreements to arbitration unless "the said [arbitration] agreement
is null and void, inoperative or incapable of being performed.”
o Importantly, Article II’s obligations are applicable in Contracting States to all international
arbitration agreements, including agreements to arbitrate locally (in the Contracting State
whose courts are asked to apply Article II) and agreements to arbitrate abroad (in a state
other than that whose courts are asked to apply Article II).
o Under the Convention, Contracting States are not free to fashion additional grounds for
denying recognition of agreements to arbitrate, and are instead subject to the mandatory
provisions of Articles II(1) and II(3).
o As one U.S. court put it, “[d]omestic defences to arbitration are transferable to [the
challenge to an arbitration agreement under the New York Convention] only if they fit
within the limited scope of defences” permitted by Article II.
o choice-of-law rules(set forth in Article V(1)(a) and, impliedly, Article II ) require
Contracting States to give effect to the parties’ choice of law governing their agreement to
arbitrate, and, in the absence of any (express or implied) choice by the parties, to apply the
law of the arbitral seat.
o Moreover, the better view is that the Convention also requires application of a validation
principle, reflecting the parties’ implied intentions, which mandates application of the
national law of the jurisdiction, related to the parties’ transaction, which will give effect to
the parties’ arbitration agreement.
o Article II(3) requires – as a uniform and mandatory international rule – the recognition of
the validity of international arbitration agreements except where such agreements are
invalid under generally-applicable, internationally-neutral contract law defences that do
not impose discriminatory burdens or requirements on the formation or validity of
agreements to arbitrate.
o Articles II and V(1)(d): Recognition of Parties’ Procedural Autonomy:
the Convention impliedly permits Contracting States to deny effect to such agreements in
limited, exceptional circumstances, in order to protect the integrity of the arbitral process,
but does not otherwise limit the parties’ procedural autonomy.
• Application of New York Convention by National Courts
o In virtually all Contracting States, the New York Convention has been implemented
through national legislation. The practical effect of the Convention is therefore often
dependent on both the content of such national legislation and the interpretations given by
national courts to the Convention and national implementing legislation.
o the extent to which Contracting States have been faithful to the Convention and its
underlying objectives varies. Most states have adopted legislation (such as the UNCITRAL
Model Law) that gives almost complete effect to the Convention, clarifying ambiguities or
adding detail regarding the role of national courts.
o Similarly, most Contracting States have treated the Convention as directly applicable (or
“self-executing”), with national courts directly applying the Convention’s terms.
o The fulfilment of that aim is dependent upon the willingness of national legislatures and
courts, in different Contracting States, to adopt uniform interpretations of the Convention.
In general, national courts have risen to the challenge of adopting uniform interpretations
of the Convention’s provisions.
• Self-Executing Character of New York Convention
o National courts have devoted only limited attention to the question whether the New York
Convention has “direct” application in the courts of Contracting States(or, formulated
differently, is “self-executing”).
o Nonetheless, the text, structure and object and purposes of the Convention indicate
decisively that the Convention is directly-applicable in those national legal system where
international treaties may have such effects. Decisions from a number of jurisdictions have
arrived at this conclusion.
II. European Convention on International Commercial Arbitration
• Drafting of the European Convention began in 1954, aimed at producing a treaty that would
improve upon the then-existing legal framework for international arbitration involving parties
from European states and particularly East-West trade.
• The Convention addresses the three principal phases of the international arbitral process –
arbitration agreements, arbitral procedure and arbitral awards.
• With regard to the arbitration agreement, the Convention (impliedly) recognizes the validity
of international arbitration agreements, while expressly providing for a specified, limited
number of bases for the invalidity of such agreements in proceedings concerning recognition
of awards.
• With regard to the arbitral procedure, the Convention limits the role of national courts and
confirms the autonomy of the parties and the arbitrators (or arbitral institution) to conduct the
arbitration proceedings;
• The Convention also addresses the allocation of competence between arbitral tribunals and
national courts over jurisdictional challenges, to the existence, validity, or scope of the
arbitration agreement.
• With regard to awards, the European Convention is designed to supplement the New York
Convention, essentially dealing only with the effects of a judicial decision annulling an award
in the arbitral seat in other jurisdictions (and not with other recognition obligations).
• The European Convention also contains a number of provisions which improve on the New
York Convention, including provisions regarding allocation of jurisdictional competence,
appointment of arbitrators, arbitral procedure and state entities.
• The European Convention’s impact in actual litigation has not been substantial (owing to the
limited number of Contracting States, all of whom are also party to the New York Convention)
• The Convention’s effects on international arbitration doctrine have been significant. This is
particularly true with regard to the arbitrators’ jurisdiction to consider challenges to their own
jurisdiction (so-called “competence-competence”) and the parties’ (and arbitrators’) autonomy
to determine the arbitral procedures.
• The Convention is currently dated – reflecting its origins during the Cold War – and efforts
were undertaken in 2000 to revise its provisions. Those efforts proved unsuccessful and there
are currently no steps being taken to revise or reinvigorate the Convention.
III. Inter-American Convention on International Commercial Arbitration
• In 1975, the United States and most South American nations negotiated the Inter-American
Convention on International Commercial Arbitration (“Inter-American Convention”), also
known as the “Panama Convention.”
• The United States ratified the Convention in 1990; other parties include Mexico, Brazil,
Argentina, Venezuela, Columbia, Chile, Ecuador, Peru, Costa Rica, El Salvador, Guatemala,
Honduras, Panama, Paraguay and Uruguay.
• Is to provide the same results as the New York Convention. Among other things, the Inter-
American Convention provides for the presumptive enforceability of arbitration agreements
and arbitral awards, subject to specified exceptions similar to those in the New York
Convention.
• It does so by providing that, where the parties have not expressly agreed to any institutional or
other arbitration rules, the rules of the “InterAmerican Commercial Arbitration Commission”
(“IACAC”) will govern.
• In turn, the Commission has adopted rules that are similar to the UNCITRAL Rules. The
Convention also introduces provisions regarding the constitution of the arbitral tribunal and
the parties’ freedom to appoint arbitrators of their choosing (regardless of nationality).
• Much less desirably, the Inter-American Convention departs from the New York Convention
by omitting provisions dealing expressly with judicial proceedings brought in national courts
in breach of an arbitration agreement.
IV. ICSID Convention
• A central pillar of the international investment regime is the so-called ICSID Convention or
“Washington Convention” of 1965.
• The Convention establishes the International Centre for Settlement of Investment
Disputes(“ICSID”), a specialized arbitral institution, which administers international
investment arbitrations and conciliations, both pursuant to the Convention and, in limited
circumstances, otherwise.
• Investment disputes are defined as controversies that arise out of an “investment” and are
between a Contracting State (or “host State”) or a designated state-related entity from that state
and a national of another Contracting State (or “investor”).
• The Convention does not apply to disputes not involving a Contracting State and an investor
from another Contracting State or to disputes between private parties; it also does not apply to
purely commercial disputes that do not involve an investment.
• The Convention does not provide an independent, stand-alone basis for arbitrating particular
disputes under the Convention.
• Instead, an ICSID arbitration cannot be pursued without a separate consent to ICSID arbitration
by the foreign investor and host state, which usually takes the form of either an arbitration
clause contained within an investment contract or a consent provided in a foreign investment
law, a bilateral investment treaty (“BIT”) (discussed below), or another treaty.
• If parties agree to submit a dispute to ICSID arbitration, the ICSID Convention (and related
ICSID Arbitration Rules) provide a comprehensive, stand-alone regime, almost entirely
detached from national law and national courts, for the conduct of ICSID arbitral proceedings.
• In particular, arbitrations under the ICSID Convention do not have a legal seat. At the same
time, despite these differences, ICSID arbitrations also have significant similarities to
international commercial arbitration, having deliberately adopted many of its procedural
aspects.
• Under the ICSID Convention regime, arbitral tribunals are granted exclusive competence-
competence to resolve jurisdictional challenges (subject to limited subsequent review by
ICSID-appointed annulment committees (and not by national courts).
• ICSID awards are subject to immediate recognition and enforcement in the courts of
Contracting States without set aside proceedings or any other form of review in national courts
(but execution upon such awards remains subject to local rules of state immunity from
execution).
• Instead, ICSID awards are subject to a specialized internal annulment procedure, in which ad
hoc committees selected by ICSID are mandated, in very limited circumstances, to annul
awards for jurisdictional or grave procedural violations; if an award is annulled the dispute
may be resubmitted to a new ICSID arbitral tribunal.
• This is a substantial difference from the New York Convention model, where awards are
subject to annulment or set-aside (in the national courts of the arbitral seat) and non-recognition
(in national courts elsewhere).
• ICSID (and not a national court) serves as the appointing authority in ICSID arbitrations, when
necessary, selecting and replacing arbitrators from a list of individuals selected by individual
Contracting States and by the Chairman of ICSID’s Administrative Council.
• Again, this differs materially from appointment mechanisms in at least some non-ICSID
settings (particularly ad hoc arbitrations, where national courts can be involved in the
appointment and challenge process.
• the ICSID Convention provides that, absent agreement of the parties, ICSID arbitrations are
governed by the law of the state that is party to the dispute (including its conflict of laws rules)
“and such rules of international law as may be applicable.”
• That trend has continued in recent years, abscised has progressively modernized the ICSID
Arbitration Rules, which led to some improvement in the institution’s arbitral procedures.
 ICSID is also currently reviewing its Arbitration Rules to improve the procedural conduct of
ICSID arbitrations.
• ICSID’s caseload has very significantly increased in the past 30 years, particularly as a
consequence of arbitrations brought pursuant to BITs or investment protection legislation. As
of 31 December 2019, the Centre had registered 745 ICSID arbitrations since its establishment,
with 39 new ICSID arbitrations registered in 2019.
V. The North American Free Trade Agreement and the U.S.–Mexico–Canada
Agreement
• The North American Free Trade Agreement (“NAFTA”) is a multilateral treaty between
Canada, Mexico and the United States which addresses a wide range of trade, investment and
other issues. The NAFTA was renegotiated in 2018 and 2019 and is terminated now, which is
replaced by the U.S.–Mexico–Canada Agreement entered into force on July 1, 2020.
• Highlights includes:
o New chapters covering Digital Trade, Anticorruption, and Good Regulatory Practices, as
well as a chapter devoted to ensuring that Small and Medium Sized Enterprises benefit
from the Agreement.
o Creating a more level playing field for American workers, including improved rules of
origin for automobiles, trucks, other products, and disciplines on currency manipulation.
o Supporting a 21st Century economy through new protections for U.S. intellectual property,
and ensuring opportunities for trade in U.S. services.
o Benefiting American farmers, ranchers, and agribusinesses by modernizing and
strengthening food and agriculture trade in North America.
• The substantive rights provided by the NAFTA to investors from NAFTA states include
protections against discriminatory treatment of a NAFTA investor by the host state, unfair
or inequitable treatment and expropriation without adequate compensation.
• Unlike the basic models for both international commercial arbitration and the ICSID
Convention, no separate consent to arbitration is required to permit an investor from one
NAFTA state to arbitrate claims under the NAFTA’s substantive provisions against another
NAFTA state.
• Prior to Canada’s and Mexico's ratifications, NAFTA arbitrations could not be conducted as
ICSID arbitrations under the Convention.
• Instead, ICSID’s “Additional Facility” Rules were applied in NAFTA arbitrations, permitting
use of ICSID as an appointing authority and administering institution, notwithstanding the
ICSID Convention's inapplicability.
• As a result, NAFTA arbitrations and awards were not subject to the ICSID Convention
(including its internal institutional annulment procedure), and were instead subject to being set
aside in national courts of the arbitral seat in the same general manner as international
commercial arbitration awards.
• Following ratification of the ICSID Convention by Canada and Mexico, NAFTA arbitrations
can be conducted pursuant to the ICSID Convention, with awards being ICSID awards, subject
to the ICSID Convention’s annulment and recognition mechanisms.
 VI. Comprehensive Economic Trade Agreement
• The 2016 Comprehensive Economic and Trade Agreement (“CETA”) between Canada and the
EU and of the EU–Vietnam Free Trade Agreement (“EVFTA”) provide for a new form of
investor-state dispute settlement.
• Both agreements provide for the establishment of a permanent court and an appellate tribunal,
instead of the ad hoc arbitral tribunals historically used in trade and investment agreements.
• This approach echoes earlier (unsuccessful) EU proposals to create a permanent international
investment court.
• Implementation of this dispute settlement mechanism is likely to face serious challenges,
including difficulties with the appointment of court members, neutrality and objectivity,
enforcement of investment court decisions and adequacy of investment protections.
VII. Bilateral Investment Treaties
• BITs play a central role in the international investment protection regime. Unlike the ICSID
Convention (and other multilateral investment treaties), BITs are bilateral treaties, tailored to
the circumstances of specific bilateral relationships and only binding the two relevant
Contracting States.
• Nonetheless, most BITs follow a common structure and include common provisions(often
contained in “model” BITs published by some states).
• Most BITs provide significant substantive protections for investments made by investors
from one of the two Contracting States in the territory of the other Contracting State.
• These protections typically include guarantees against uncompensated expropriation,
unfair or inequitable treatment and discriminatory treatment.
• BITs also very frequently (but not always) contain dispute resolution provisions which
permit investors from one Contracting State to submit “investment disputes” with the other
Contracting State to arbitration, subject occasionally to specified exclusions(e.g., for tax
disputes or in relation to specific industries).
• Importantly, like the NAFTA and the Energy Charter Treaty, these provisions provide each
state’s binding consent to arbitration of investment disputes;
• this permits investors to demand arbitration of covered disputes against the host state without
a traditional contractual arbitration agreement with the host state or other separate consent to
arbitration by the host state (so-called “arbitration without privity”).
• These provisions have been characterized as "standing offers to arbitrate” by host states, which
investors can typically accept by commencing an investment arbitration pursuant to the BIT,
thus giving rise to an arbitration agreement.
• A few BITs do not include the Contracting States’ consent to arbitration, instead requiring
foreign investors to conclude a separate arbitration agreement with the host state in order to
arbitrate an investment dispute under the treaty, but this is unusual.
• BITs contain a variety of different arbitration mechanisms. Some BITs provide for ICSID
Convention arbitration of investment disputes under the BIT; other BITs provide for some
form of institutional arbitration (e.g., ICC or SCC) or ad hoc arbitration (e.g., under the
UNCITRAL Rules); and some BITs permit investors to select among any of the foregoing (or
other) options.
• The appointing authority in a particular BIT arbitration will vary, depending on the terms of
the individual BIT and the option(s) selected by the investor. Unless a BIT arbitration proceeds
under the ICSID Arbitration Rules and ICSID Convention, BIT awards will be subject to the
New York Convention and general national arbitration legislation.

National framework for Internaitonal Commercial Arbitration

I. France
• International arbitration in France is governed by the French Code of Civil Procedure.
• The provisions of the Code of Civil Procedure have produced a strongly pro-arbitration legal
framework for international commercial arbitration. That regime has been materially assisted
by the French judiciary and academic community.
• French law emphatically recognizes the autonomy (or separability) doctrine, and provides for
the presumptive validity and enforceability of arbitration agreements.
• French law also expressly grants arbitrators the power (competence-competence) to
decide challenges to their jurisdiction.
• Further, if claims which are allegedly subject to an arbitration agreement are brought before
the French courts, the Code of Civil Procedure provides for dismissal of the judicial
proceedings, except if the arbitral tribunal has not yet been constituted and if the
arbitration agreement is "manifestly null or manifestly inapplicable.”
• With regard to the law applicable to the arbitration agreement, French courts have developed
a relatively unusual doctrine that arbitration agreements are autonomous, subject to
specific principles of international law, rather than to national law.
• The no arbitrability doctrine and has not been invoked to any significant extent by French
courts, except in labour and consumer matters.
• In contrast to a number of developed jurisdictions, French courts do not appear to have
developed “pro-arbitration” rules of interpretation of arbitration agreements.
• French courts generally afford the parties to an arbitration agreement substantial
autonomy with respect to choice of law, procedural rules, selection of arbitrators and the
like.
• In particular, French law expressly provides that arbitrators sitting in France are
generally not bound by local rules of civil procedure applicable in French courts, and have
very wide discretion in adopting arbitral procedures.
• French law also confers the power to the arbitral tribunal – once it is constituted – to order
any provisional or conservatory measures that it deems appropriate.

II. Switzerland
• International arbitration in Switzerland is governed primarily by Chapter 12 of the federal
Swiss Law on Private International Law.
• The current version of the Swiss Law on Private International Law replaced, in so far as
international arbitration is concerned, the Swiss Inter-Cantonal Concordat. The Swiss Law
on Private International Law’s arbitration chapter is noteworthy for its brevity, comprising
only 19 articles, drafted in brief, declarative terms.
• Under the Swiss Law on Private International Law, international arbitration agreements are
readily and effectively enforced.
• The Law expressly recognizes the separability doctrine and prescribes a specialized “pro-
arbitration "choice-of-law regime, pursuant to which international arbitration agreements,
providing for arbitration in Switzerland, are substantively valid provided they conform to
either..
a) the law chosen by the parties(where the parties have made a specific choice of law
governing the arbitration agreement);
b) the law applicable to the dispute (in particular, that applicable to the principal contract); or
c) Swiss law.
• The Swiss Law on Private International Law also expressly confirms the arbitrators’
competence-competence, while generally permitting arbitral tribunals in Swiss-seated
arbitrations to resolve jurisdictional challenges in the first instance.
• Swiss law also provides for the arbitrability of a wide range of disputes and the Swiss
Federal Tribunal has adopted a relatively expansive “pro-arbitration” rule of interpretation of
the scope of international arbitration agreements.
• Where claims subject to an arbitration agreement are asserted in Swiss courts, the parties’
arbitration agreement will be given effect by dismissing judicial proceedings.
• As to awards made in Switzerland, actions to annul are limited to grounds generally
paralleling those in the New York Convention.
• Parties can agree to exclude even the review of international awards, provided that none of
the parties are domiciled in Switzerland.
• Swiss courts will recognize and enforce foreign awards without substantial judicial review,
subject only to the provisions of the New York Convention.
• As in France, many judicial functions relating to international arbitration are centralized, with
the Swiss Federal Tribunal generally having original jurisdiction in annulment actions.

III. Arbitration in England

• Both international and domestic arbitrations seated in England, Wales, or Northern Ireland are
governed by the English Arbitration Act, 1996, which provides a detailed (110 separate
sections) statement of English arbitration law.
• The Act is based roughly on the UNCITRAL Model Law, while introducing a number of
formal and substantive innovations.
• The 1996 Act provides expressly for the validity of written (and some other) arbitration
agreements (as to both existing and future disputes) and for the stay of English court
proceedings concerning claims subject to valid arbitration agreements.
• The Act also provides for the separability of arbitration agreements, and for recognition of
the arbitral tribunal's competence-competence to rule on its own jurisdiction.
• English judicial decisions have interpreted the competence-competence doctrine broadly, and
adopted a robust “pro-arbitration” approach to the interpretation of international arbitration
clauses.
• The Act does not address the subject of no arbitrable disputes or claims, but English courts
have generally adopted a narrow view of the doctrine.
• The 1996 Act contains a number of provisions granting arbitrators broad freedom in
conducting arbitral proceedings, with a minimum of judicial interference.
• This freedom includes wide authorization with respect to procedural and evidentiary
matters, appointment of experts, ordering the payment of security for the costs of the
arbitration and granting conservatory or provisional measures.
• Among other things, it is now clear that arbitrators conducting arbitral proceedings seated in
England are not obliged to apply local rules of English civil procedure or evidence.
• The Act also provides for English judicial assistance to arbitrations seated in England,
including in taking evidence, appointing or removing arbitrators and granting provisional
measures in aid of arbitration.
• With respect to awards made in England, the Act departs entirely from the historic “case stated”
procedure and provides only limited grounds for annulling international arbitral awards
made in England.
• The Act’s grounds for annulling awards are now limited to lack of substantive jurisdiction
of the tribunal, limited categories of “serious irregularity” in procedural matters and limited
appeals on points of law.
• Appeals on legal issues may only be brought with leave of the court and may be excluded
by agreement between the parties; English courts have held that appeal for error of law is
impliedly excluded where the parties have chosen a substantive applicable law other than
English law or where the parties have chosen a set of institutional rules, such as the ICC Rules,
which excludes the right of appeal to the extent possible.
• The Act also provides for the recognition and enforcement of foreign arbitral awards, primarily
by incorporating the provisions of the New York Convention.

IV. USA
• Most important issues relating to international arbitration agreements and arbitral awards are
governed primarily by U.S. federal (rather than state) law.
• In particular, the “Federal Arbitration Act” (or “FAA”) sets forth a basic statutory regime for
arbitration, with separate chapters for both domestic arbitration (Chapter 1) and international
arbitrations subject to the New York and InterAmerican Conventions(Chapters 2 and 3).
• The FAA has the distinction – and burden – of being one of the oldest surviving arbitration
statutes in any major jurisdiction. Additionally, although limited, the role of state law in the
enforcement of international arbitration agreements is occasionally important.

Overview of Leading International Arbitration Institutions and Institutional Arbitration

Rules
• Arbitral institutions have promulgated sets of procedural rules that apply where parties have
agreed to arbitration pursuant to such rules. Among other things, institutional rules set out
the basic procedural framework and timetable for the arbitral proceedings.
• Institutional rules also typically authorize the arbitral institution to select arbitrators in
particular disputes and resolve challenges to arbitrators(that is, to serve as "appointing
authority”), to designate the place of arbitration, to decide issues of consolidation or joinder,
to fix or influence the fees payable to the arbitrators and (sometimes) to scrutinize the
arbitrators’ awards to reduce the risk of unenforceability.
• Each arbitral institution has a staff (with the size varying significantly from one institution to
another) and a decision-making body.
• It is fundamental that arbitral institutions do not themselves arbitrate the merits of the parties’
dispute. This is the responsibility of the particular individuals selected as arbitrators.
• Arbitrators are virtually never employees of the arbitral institution, but instead are private
persons selected by the parties.
• If parties cannot agree upon an arbitrator, most institutional rules provide that the host
institution will act as an “appointing authority,” which chooses the arbitrators in the absence
of the parties’ agreement.

Overview of Institutions and their rules on Arbitration

I. Ad hoc arbitration
• Ad hoc arbitrations are not conducted under the auspices or supervision of an arbitral
institution. Instead, parties simply agree to arbitrate, without designating any institution to
administer or otherwise support their arbitration.
• Ad hoc arbitration agreements will sometimes choose an arbitrator (or arbitrators), who is(or
are) to resolve the dispute without institutional supervision or assistance. The parties will
sometimes also select a pre-existing set of procedural rules designed to govern ad hoc
arbitrations.
• For international commercial disputes, the United Nations Commission on International Trade
Law (UNCITRAL) has published a commonly-used set of such rules, the UNCITRAL
Arbitration Rules.
• Where ad hoc arbitration is chosen, parties will sometimes designate an appointing authority,
that will select the arbitrator(s) if the parties cannot agree (or if their chosen arbitrator is unable
to serve) and that, in some cases, will consider any subsequent challenges to members of the
tribunal.
• If the parties fail to select an appointing authority, then the national arbitration statutes of many
states permit national courts to appoint arbitrators in locally-seated arbitrations(although many
practitioners regard this as less desirable than the selection of arbitrators by an experienced
appointing authority).

II. United Nations Commission On International Trade Law [UNCITRAL]

Arbitration Rules
• The UNCITRAL Arbitration Rules occupy an important position, both historically and in
contemporary arbitration practice. In 1973, UNCITRAL proposed the preparation of model
arbitration rules. The objective of the UNCITRAL Rules was to create a unified, predictable
 and stable procedural framework for international arbitrations without stifling the informal and
flexible character of the arbitral process.
• The Rules aimed ambitiously to be acceptable to common law, civil law and other legal
systems, as well to both capital-importing and capital-exporting interests.
• The Rules were promulgated by Resolution 31/98, adopted by the General Assembly of the
United Nations on 15 December 1976.
• UNCITRAL reviewed the usage of the Rules during the first decade of the 21st century and,
after extensive consultations and study, undertook a revision of the Rules in 2006. On 25 June
2010, UNCITRAL published extensive revisions of the original UNCITRAL Rules (the first
revision since their adoption).
• A further revised version of the UNCITRAL Rules was published in 2013, which incorporated
a reference to the UNCITRAL Rules on Transparency in Treaty-Based Investor-State
arbitration (the “UNCITRAL Rules on Transparency”).
• The UNCITRAL Rules are designed for use in ad hoc international arbitrations. When the
Rules were adopted in 1976, they were the only set of rules available specifically for that
purpose.
• Although a few alternatives now exist, most states, which generally will have supported the
Rules in the United Nations debates, and their state-owned entities, find it difficult to object to
their use in an arbitration agreement or arbitral proceeding.
• This includes provisions for initiating an arbitration, selection and challenge of arbitrators,
conduct of the arbitral proceedings (including, in the 2010 Rules, the joinder of third persons
and issuance of interim relief ), choice of applicable law or rules of law, awards and costs of
the arbitration.
• The Rules also contain provisions confirming the presumptive separability of the arbitration
clause from the underlying contract, and the tribunal’s power (competence-competence) to
consider jurisdictional objections.
• Under the Rules, where the parties have not agreed on an appointing authority, the Secretary
General of the Permanent Court of Arbitration serves a sui generis function, of designating a
suitable individual or institution to act as appointing authority.
• The UNCITRAL Rules have contributed significantly to the harmonization of international
arbitration procedures.
• A number of arbitral institutions have either adopted the UNCITRAL Rules entirely, or have
substantially adopted the Rules in prescribing a set of local institutional rules.
• Although designed principally for international trade disputes, the Rules are not limited to
commercial matters and have also been used successfully in both state-to state and investor-
state arbitrations.

III. UNCITRAL Transparency Rules, 2013

• In 2013, the UNCITRAL Rules were supplemented by reference to the UNCITRAL
Transparency Rules, which came into effect on 1 April 2014 and which apply as part of the
UNCITRAL Rules in investor-state arbitrations.
• The Rules can also be used in investor-state arbitrations initiated under rules other than the
UNCITRAL Rules or in ad hoc proceedings.
• The Rules contain a variety of provisions which enhance public awareness of and involvement
in investor-State arbitrations, including provisions for publication of information about cases,
publication of submissions, orders and awards, and amicus curiae submissions.
• Among other things, the UNCITRAL Transparency Rules provide for publication of
information about the arbitrations which are subject to their provisions, including the names of
the disputing parties, the economic sector involved and the treaty under which the arbitration
is commenced, the parties’ (and any third parties’) submissions, lists of exhibits and awards
and procedural decisions of the arbitral tribunal.
• The Rules authorize third persons to file written submissions in the arbitration and provide that
hearings are public.
• According to the Rules, exceptions can be made to publication requirements in order to protect
confidential information or the integrity of the arbitral process
• In addition to the UNCITRAL Transparency Rules, the United Nations Convention on
Transparency in Treaty-based Investor-State Arbitration (the “Mauritius Convention on
Transparency”) was adopted on 10 December 2014 and entered into force on 18 October 2017
(it was signed by 23 states, five of which also ratified it).
• The Mauritius Convention extends the application of the UNCITRAL Transparency Rules to
investment arbitrations arising under investment treaties that were concluded before the
UNCITRAL Transparency Rules came into force, regardless of the applicable arbitration rules.
• The Mauritius Convention applies unless either the respondent state or the home state of the
claimant have made a reservation under the Convention or excluded its application to certain
types of treaties or disputes.

IV. International Chamber of Commerce; International Court of Arbitration [ICC]

• The ICC’s annual caseload was well above 300 cases filed per year during much of the 1990s,
and, by 2019 had reached 869 cases filed per year.
• The ICC has promulgated a set of ICC Rules of Arbitration (which are periodically revised,
most recently in 2012 and 2017 ), as well as the ICC Mediation Rules, Rules of ICC as
Appointing Authority in UNCITRAL or Other Arbitration Proceedings, ICC Rules for
Expertise, the ICC Documentary Instruments Dispute Resolution Expertise [DOCDEX Rules,
2015], the ICC Dispute Board Rules and the ICC Rules for a Preorbital Referee Procedure.
• The ICC Rules are published in a number of languages, including English, French, Spanish,
German, Russian, Arabic, Chinese, Japanese, Italian, Polish, Portuguese and Ukrainian
• Under the ICC Rules, the ICC (through the International Court of Arbitration (“ICC Court”))
is extensively involved in the administration of individual arbitrations.
• Among other things, the ICC Court and its Secretariat are responsible for service of the initial
Request for Arbitration;
o fixing and receiving payment of advances on costs of the arbitration by the parties;
o confirming the parties’ nominations of arbitrators;
 o appointing arbitrators if a party defaults or if the parties are unable to agree upon a presiding
arbitrator or sole arbitrator;
o considering challenges to the arbitrators including on the basis of lack of independence;
o deciding issues of consolidation and joinder;
o reviewing and approving so-called “Terms of Reference” (a unique procedure under the
ICC Rules), which define the issues and procedures for the arbitration; scrutinizing a
tribunal’s draft award for formal and other defects; and
o fixing the arbitrators’ compensation
• The ICC’s International Court of Arbitration is not, in fact, a “court,” and does not itself
decide disputes or act as an arbitrator. Rather, the ICC Court is an administrative body that acts
in a supervisory and appointing capacity under the ICC Rules.
• It maintains a sizable legal and administrative staff of around 40 persons, from more than a
dozen nationalities, organized as a Secretariat.
• Specialized teams of counsel and administrative staff are assigned to cases originating from
particular geographic, linguistic and/or cultural regions
• In 2019, for example, ICC arbitrations were conducted in 62 different countries.
• One of the ICC’s principal functions is the appointment of arbitrators and the resolution
of challenges to arbitrators.
• The ICC does not maintain a formal panel or list of potential arbitrators and instead relies
heavily on the experience of its Secretariat and the ICC’s “National Committees” in making
arbitrator appointments.
• The ICC’s Rules have often been criticized as expensive and cumbersome.
• The 2012 and 2017 amendments to the Rules reflected a concerted effort to increase the
efficiency, speed and effectiveness of ICC proceedings.
• In particular, provisions were added to the ICC Rules in the 2012 amendments addressing
multiple contracts and parties, case management conferences and emergency arbitrator
procedures, while the 2017 amendments introduced the expedited procedure providing for
a streamlined arbitration with a reduced scale of fees.
• on 1 January 2019, the Note introduces a requirement for arbitrators to consider disclosing
any relationship with a non-party that might have an interest in the outcome of the
arbitration, and prospective arbitrators are invited to list in their biographical information all
treaty-based arbitrations in which they acted as arbitrator, counsel or expert.
• Related to the ICC Rules of Arbitration are the ICC’s ADR Rules. These Rules provide (where
agreed by the parties) a skeletal procedure for non-binding conciliation.

V. London Court of Intl. Arbitration (LCIA)

• Founded in 1892, caseload exceeded 300 cases filed in recent years.
• The LCIA administers a set of arbitration rules, the LCIA Arbitration Rules, which were
extensively revised in 1998, 2014 and 2020.
• Although identifiably English in drafting style, and to a lesser extent in procedural approach,
the LCIA Rules generally provide a sound basis for international dispute resolution,
particularly for parties desiring common law procedures(e.g., disclosure, security for costs).
• The LCIA Rules contain no Terms of Reference procedure and do not provide for institutional
scrutiny of draft awards.
• the LCIA Rules set out the powers of an LCIA arbitral tribunal in some detail. The powers to
order disclosure and security for legal costs(i.e., a deposit or bank guarantee securing the
estimated amounts which an unsuccessful claimant would be liable to reimburse to a successful
respondent for its costs of legal representation) are included among the arbitrators’ powers.
• A particular procedural advantage of the LCIA Rules is their provision for expedited formation
of the arbitral tribunal. Consistent with many other institutional rules, the LCIA Rules also
permit intervention of third parties in LCIA arbitrations(subject to prescribed conditions).
• Unlike the ICC, the LCIA maintains a database of arbitrators from which it selects arbitrators,
taking into consideration the nature and circumstances of the dispute, the nationality, location
and languages of the parties and the number of parties.
• Most LCIA arbitrations are seated in London. In the absence of agreement by the parties to the
contrary, London will be selected by the LCIA asthe arbitral seat under Article 16(1) of the
LCIA Rules.

VI. Singapore International Arbitration Centre

• The Singapore International Arbitration Centre (“SIAC”) was established in 1991, initially for
disputes arising out of construction, shipping, banking and insurance contracts, with a
Southeast Asian focus. More recently, consistent with Singapore's increasing importance as an
international commercial and financial centre, SIAC has seen a wider range of disputes,
including trade, commercial, maritime/shipping, corporate, construction and other matters,
with parties from all parts of the world.
• In 2019, 479 new arbitrations were filed with SIAC.
• The SIAC has made a determined, and successful, effort in recent years to internationalize its
procedures, including by appointing a Board of Directors, Secretariat, Court and President with
broad international experience. SIAC arbitrators are appointed by the President (or Vice-
President) of the SIAC Court of Arbitration. Appointments are of arbitrators from Asia,
Europe, the Americas and elsewhere, with Singapore, English, U.S. and other Asian
nationalities being most common.
• SIAC recently published the SIAC Investment Arbitration Rules. The Rules provide a bespoke
set of procedures for investment arbitrations, offering an efficient and pragmatic alternative to
the ICSID and UNCITRAL Rules.

VII. Permanent Court of Arbitration

• The PCA’s original functions did not involve serving as an appointing authority.
• The PCA consists of three organs:
(1) an Administrative Council, which is comprised of the representatives of Member States
that are party to the Hague Conventions and which serves as the governing body of the PCA;
(2) the Members of the PCA, which is a list of potential arbitrators chosen by the Member
States (each Member State being entitled to appoint up to four individuals); and
 (3) an International Bureau, which functions as a registry or secretariat and provides
administrative support to arbitral tribunals conducting arbitrations under the PCA Rules or
where the PCA is registry.
• The 2012 PCA Rules are similar to the 2010 and 2013 UNCITRAL Rules, providing greater
flexibility to the parties than the PCA’s earlier rules, but are also specifically tailored to suit
cases involving states, state-controlled entities and intergovernmental organizations.
• Among other things, the 2012 PCA Rules provide that a state’s or state-entity’s adoption of
the Rules in a dispute with a non-state party constitutes a waiver of immunity from jurisdiction
(although immunity from enforcement requires an express waiver); provide for three-person
tribunals by default, but also allow the parties to agree upon one or five arbitrators(the latter
being common in inter-state arbitrations);
• permit the parties to select arbitrators that are not Members of the PCA’s Court; allow for the
joinder of third parties and multi-party appointment of arbitrators; contain provisions on the
conduct of site inspections; offer a model arbitration clause for inclusion in treaties; and
provide for application of international law in state-to state disputes, the rules of
intergovernmental organizations where relevant and the 2013 UNCITRAL Rules in investor-
state disputes.

VIII. Swiss Chambers’ Arbitration Institution

• Switzerland’s major cities have historically maintained local Chambers of Commerce and
Industry which have administered institutional arbitrations, including international
arbitrations. On 1 January 2004, the leading Swiss Chambers of Commerce adopted a unified
set of arbitration rules, the Swiss Rules of International Arbitration (“Swiss Rules” or “Swiss
International Arbitration Rules”), and designated an Arbitration Committee to oversee
arbitrations conducted under the Swiss Rules.
IX. World Intellectual Property Organization
• The Arbitral Centre of the World Intellectual Property Organization (“WIPO”) was established
in Geneva, Switzerland in 1994. WIPO and its Arbitration Rules are designed particularly for
intellectual property disputes, although other types of controversies are not excluded from use
of the WIPO Rules and facilities. WIPO’s Arbitration Rules contain detailed provisions dealing
with issues that are of particular importance in intellectual property disputes.
• These include provisions relating to discovery, disclosure and protection of trade secrets, and
confidentiality of arbitral proceedings. The WIPO Rules were revised in 2014 and in 2020 and
now incorporate provisions for emergency relief proceedings.

X. Court of Arbitration for Sport

• The Court of Arbitration for Sport (“CAS”) was established in Lausanne, Switzerland, in 1984,
and is sometimes termed the “Supreme Court of world sport.” Most major sports governing
bodies use the CAS’s arbitration facilities, including the International Olympic Committee,
International Association of Athletics Federations, Fédération Internationale de Football
 Association (“FIFA”), and the Union of European Football Associations(“UEFA”). North
American sports leagues are notable exceptions.
• The “ordinary” arbitration procedure governs commercial sports disputes submitted to CAS
(e.g., disputes arising out of sponsorship or licensing agreements, or employment contracts)
and is very similar to traditional commercial arbitration proceedings.
• The “ordinary” arbitration procedure governs commercial sports disputes submitted to CAS
(e.g., disputes arising out of sponsorship or licensing agreements, or employment contracts)
and is very similar to traditional commercial arbitration proceedings.
• Appeals filed against decisions taken by sports-governing bodies(e.g., anti-doping matters and
other disciplinary sanctions, eligibility issues, match fixing) are governed by the appeals
procedure and constitute about 80% of the CAS caseload. Ad hoc Divisions are established on
site at sporting competitions and, in principle, are able to render decisions within 24 hours of
an application being filed.
• CAS’s new “Anti-Doping Division” began operating in January 2019 under a separate set of
arbitration rules and “has been established to hear and decide anti-doping cases as a first-
instance authority "conferred to it by sports-governing bodies.
• Parties to CAS arbitrations must select arbitrators from a list of arbitrators compiled by the
International Council of Arbitration for Sport (“ICAS”) and published on the CAS website.
• The CAS maintains three separate lists of arbitrators:
(i) the general list; (ii) the football list; and (iii) the Anti-Doping Division list.
• Arbitrators appearing on the new Anti-Doping Division list (eligible in first-instance
procedures related to anti-doping matters) may not serve as arbitrators in proceedings
conducted by the Appeals Arbitration Division, but remain eligible for proceedings submitted
to the Ordinary Arbitration Division.

Overview of International Guidelines and Soft Law

I. IBA Rules on the Taking of Evidence in International Arbitration
• The International Bar Association’s “Rules on the Taking of Evidence in International
Arbitration” fulfil related functions.
• The Rules attempted to provide a blend of civil law and common law approaches to the subjects
of discovery and evidentiary presentations in arbitration. The Rules were not independently
binding, but could either be adopted by parties in their arbitration agreement (or otherwise) or
relied upon by arbitral tribunals for guidance in making procedural orders.
• The IBA Rules were extensively revised in 1999, and retitled the “Rules on the Taking of
Evidence in International Commercial Arbitration” (“IBA Rules” or “IBA Rules on the Taking
of Evidence”). The 1999 IBA Rules established a reasonably-detailed and workable set of
procedures for witness evidence and disclosure requests in international arbitrations.
• Like their predecessors, the 1999 IBA Rules were not independently binding, but were
intended for incorporation into parties’ arbitration agreements or as a basis for tribunals’
 procedural rulings. In practice, the 1999 IBA Rules came to be used frequently as guidelines
for arbitral procedures in international commercial arbitrations.

II. IBA Guidelines on Party Representation in International Arbitration

• In 2013, the IBA adopted “Guidelines on Party Representation in International Arbitration,”
which seek to provide guidance regarding the conduct of counsel and other party
representatives in international commercial, investment and other arbitrations. By their terms,
Guidelines are not intended to “displace otherwise applicable mandatory laws, professional or
disciplinary rules, or agreed arbitration rulesthat may be relevant or applicable to matters of
party representation,” and instead purport to be purely “contractual” in nature and applicable
only when adopted by the parties.

III. Chartered Institute of Arbitrators “Practice Guidelines”

• The Chartered Institute of Arbitrators(based in London) has issued a number of “Practice
Guidelines” providing recommendations regarding various practical aspects of the
international arbitral process.
• Among other things, the Guidelines address the interviewing of arbitrators, documents-only
arbitrations, costs orders and jurisdictional challenges: the Guidelines are significantly
influenced by domestic English practice and are infrequently relied upon in international cases.
The Guidelines are considered a work in progress by the Institute with their most recent updates
in August 2016.

IV. Cybersecurity Guidelines

• In 2018, the IBA adopted “Cybersecurity Guidelines” which address the issue of cybersecurity
in arbitration and provide for a set of recommendations to law firms, including the use of
effective technology to protect data. The IBA Cybersecurity Guidelines are in line with the
initiatives of some other institutions, such as the International Council for Commercial
Arbitration (“ICCA”) Protocol, which seek to increase awareness about information security
in international arbitration proceedings and to provide a framework to establish reasonable
cybersecurity measures for individual arbitration proceedings.

V. Hague Rules on Business and Human Rights Arbitration

• In 2019, a group of practicing lawyers and academics, chaired by Judge Bruno Simma, released
the Hague Rules on Business and Human Rights Arbitration (the “Hague Rules”). The Hague
Rules provide arbitral procedures for disputes arising from human rights breaches related to
transnational business conduct. The 2019 Hague Rules do not seek to displace state-based
judicial or non-judicial remedies, and were developed to provide a voluntary international
dispute mechanism to implement the UN Guiding Principles on Business and Human Rights.
NOTE: (From 1st Module, parts which has to be done are: Theories of arbitration and National
Arbitration (India)
Module II
Arbitration law, practice and procedure in India

The Arbitration and Conciliation Act 1996 is the key law governing arbitration in India. The act
has four parts:

• Part I sets out general provisions on domestic arbitration;

• Part II addresses the enforcement of foreign awards (Chapter 1 deals with New York
Convention awards and Chapter II with awards under the 1927 Geneva Convention);
• Part III deals with conciliation; and
• Part IV sets out certain supplementary provisions.
Parts I and II are the most significant and are based on the UNCITRAL Model Law and the New
York Convention respectively.

NOTE: Till now, the definition clause and section 3 has been completed

Section 4

Section 4. Waiver of right to object.—A party who knows that—

(a) any provision of this Part from which the parties may derogate, or

(b) any requirement under the arbitration agreement,

has not been complied with and yet proceeds with the arbitration without stating his objection to
such non-compliance without undue delay or, if a time limit is provided for stating that objection,
within that period of time, shall be deemed to have waived his right to so object.

• Waiver is an intentional relinquishment of a known right.

• It is statutorily recognised in s. 63 of contract act and s. 115 of evidence act.
• It is a waiver of derogable provisions of the act.
• It applies to Part I.
• Prasun roy v. Calcutta metropolitan development authority, 1987 4 SCC 217
o Court observed “long participation and acquiescence in the proceedings preclude
such a party from contending that the proceedings were without jurisdiction”.
• P.C. Joshi v. State of UP, 1961 2 SCR 3
o The act does not expressly stipulate the provisions from which parties may
derogate. Matters which are not left to the autonomy of the parties, are regarded as
‘non-derogable’ provisions of the act.
• Bharat broadband network v. united telecom ltd., 2019 5 SCC 755
o Court made a distinction between deemed waiver under s. 4 and waiver by express
agreement in writing bw parties under proviso to s. 12.5.
o The provision to s. 12.5 will only apply if subsequent to disputes having arisen
between the parties, by an express agreement in writing, the parties waive te
applicability of subsection 5 of section 12.
o The expression ‘express agreement in writing; refers to an agreement made in
words as opposed to an agreement which is to be inferred by conduct. this
agreement must be with the full knowledge that the proposed arbitrator is ineligible
to be appointed as per the act, but the parties have full faith and confidence in him
conducting the proceedings.
• MSP infra ltd. v. MP Road development corpn. ltd.
o Court held that a party who is bound by virtue of s. 16(2) to raise any objection it
may have to jurisdiction of tribunal before or at the time of submission of its
statement of deense and at any time thereafter it is expressly prohibited. The
objection of lack of jurisdiction must be raised not later than the submission of
statement of defense under s. 16(2).
o I the objection is not raised in a timely manner, it would stand waived.
•
Forum Selection Agreement – Exclusive and Non-Exclusive

Centralized Forum (Forum or Institution which decides)

Under International Law, State is the subject, not the person/individual.

International law won’t apply in conflict of laws

Objectives of International Commercial Arbitration

Costs:

Timings and costs depend on the Institution/ad hoc tribunal rules. The review of an award will also
have associated costs. Sometimes extra charges are also incurred when experts are appointed or
court’s administrative aid is taken.

Confidentiality or Privacy:

No difference per se, but applications are different.

Confidentiality involves 3 parties.

Privacy leads to undefined collateral damages (in practice).

Non-signatories influenced by the Award are also bound by confidentiality.

Facilitating amicable settlement:

Sec 31. Any settlement reached by parties by way of conciliation or mediation would be treated as
an award

1. Recognition of the Award and Enforcement of the Award

2. Recognition of the Arbitration Agreement by the Executive Body

3. Award will not be a domestic award, since if it is a domestic award, NY Convention won’t be
applicable

4. Executing court may not impose more conditions/fees, or extra conditions apart from those
written in the UNCITRAL Model Law.
5. Arguments on refusal – Evidence has to be presented. If there is refusal of the award, then
there are certain conditions that will be taken into account such as Notice, Tribunal Composition
not according to law, etc. This must be proven by evidence, e.g., Proper notice was not given must
be proven by evidence.

In practice, evidence may be – first, if it is written in curial law. And second, if in the notice, Commented [SP1]: The lex arbitri (also called the
“procedural law” of the arbitration, the “curial law” or the
number of days is written in the agreement. “loi de l'arbitrage“) is a body of national rules that
sets the general framework for the conduct of an
international arbitration
Based on the Arguments by the counsel:

• Adjournment seeking, that was based on the consultation with the client. Law applicable
on the substance of the dispute (is it questionable?)
• Undermine the integrity of the arbitration process
• By instrument of the consent

Kompetenz-Kompetenz [Add definition] – The Arbitration Tribunal cannot go beyond the issues Commented [SP2]: The doctrine of kompetenz-
kompetenz is enshrined in the UNCITRAL Model Law
consented by the party. If the Tribunal decides on an issue that was never consented by the Parties, on International Commercial Arbitration and Arbitration
Rules. Article 16(1) of the Model Law and article 23(1)
then that part of the award is liable to be set aside during the enforcement proceedings. Consent of the Arbitration Rules both dictate that "[t]he arbitral
tribunal shall have the power to rule on its own
is essential. jurisdiction, including any objections with respect to the
existence or validity of the arbitration agreement
6. Security at the time of adjournment by the other party

7th July, 2022

Inter-American Convention

Not all American countries are party to UNCITRAL. There exists the Inter American Convention.

• They have an Inter-American Committee to decide

• If there is a breach of the arbitration agreement, the court can decide that matter or in
assisting the parties. This is not allowed in other conventions. This may assist in the delay
of the arbitration proceedings.

New York convention will be applicable in enforcement proceedings if both parties to the dispute
are parties of the NYC, will be applicable. IAC is effectively like the model law (conceptually,
i.e., does not include enforcement provisions).
(Remaining provisions are similar to other conventions)

LEGAL FRAMEWORK OF INVESTMENT ARBITRATION

➢ International Centre for Settlement of Investment Disputes (World Bank)

Commercial issues and transactions will not be dealt by ICSID. Has its own international legal
framework. First BIT [Check and write]

ICSID is well known in IA. India is not a party to the ICSID Convention. Some disputes have Commented [SP3]: While India has not stated the
specific reasons for its absence from the ICSID
been submitted to ICSID involving India. Irrespective of whether the State is a party or not, ICSID Convention, in 2000, the Indian Council for
Arbitration recommended to the Indian Ministry of
can be used to resolve the dispute. This is done through the Additional Facility Rules. Finance that India refrain from becoming a signatory to
the ICSID Convention on the following grounds:
AF Rules are for those states which are not party to the ICSID Convention, but want to (1) the Convention’s rules for arbitration leaned towards
the developed countries and
submit dispute to ICSID.
(2) there is no scope for a review of the award by an
Generally, a BIT or Multilateral IT specifies that investment dispute would be resolved through Indian court even if it violates India’s public policy

ICSID arbitration. There is a procedural clause in the BIT or MIT.

In commercial contracts, there are specific conditions based on one of the country’s domestic
contract law. This is where an arbitration clause may be found. The Arbitrator has to follow 3 sets
of laws – [Mention]

In IA, set up is different. This is so because there is an interest of the State since it wants to attract
investments. For this purpose, States enter into agreement, i.e., treaty. Two states enter into
Treaties on subject specific treaties. For e.g., the India-Japan Metro rail project in India. This will
include many sub contracts. There is also a BIT. Practically, the subject specific
treaty/agreement may be that the treaty is divided into 2 parts – first would be substantive
provisions and second would be procedural provisions.

The purpose:

• To protect the investment

• To promote the investor

Based on these objectives, the Tribunal decides the matter

Presumptions:
 • Because of these two objectives which must be taken into consideration, it goes towards a
bias towards the investor. Majority of awards passed under an IA have been in favor of
investors. However, this is not always correct.
• Another presumption of biasness is that, generally ICSID passes awards in favor of
developed states. However, this is incorrect.
There are many cases where developing states have lost, which led to such a presumption.

➢ Substantive Clauses:

In a BIT once States sign, when a State enters into a private contract with an investor, the State
loses its sovereignty towards the investor with regards to this private contract. It does not affect
the obligations that the State has under International Law, for e.g., environmental protection,
diplomatic protection, etc. E.g., the State has to give environment clearance certificate, the same
conditions will be followed with the foreign investor as well.

Host State – where the investment is made

Home State – home State of the investor

[Include distinction from internet]

E.g., a foreign investor of Japan will enter into an Agreement with the Indian State. Here, India
signs such a contract not in the capacity of a sovereign, but as a private party to the contract.

1. Fair and Equitable Treatment:

Investor is interested in protecting its investment. It expects that protections offered under the BIT
is awarded, as well as any favorable treatment it may give to investors of other States.

2.

Subject – Kinds of Arbitration, i.e., Investment and Commercial Arbitration

Subject Matter – Commercial or Investment into different subjects such as Maritime, Construction,
etc.
Seat – Country X’s law applies; this implies that country X is the seat of arbitration. This term is
juridical in nature. Laws governing the contract. The procedural laws for the arbitration would be
decided by the parties.

[Include the 3 laws applicable in commercial arbitration. Also include Seat, Venue and Place]

Structure of International Arbitration

Region wise, world is divided into 4

i. Inter-American
ii. European
iii. Rest of the World, including Asia
iv. Africa

1. Arbitration in Switzerland – Swiss laws can be compared with UNCITRAL laws, i.e.,
they are not at par with UNCTIRAL laws by way of amendments.

(https://www.acc.com/resource-library/arbitration-switzerland-quick-overview-revised-
swiss-law-international-arbitration)

1.1.At present, International Arbitration seated in Switzerland is governed by Chapter 12

of the Private International Law Act of 1987 (“PILA”).
1.2.Two major objectives –
1.2.1. Autonomy of the parties
1.2.2. Arbitration Agreement
1.3.New Amendments
1.3.1. Possibility to make English language submissions to the Swiss Federal Supreme
Court. This was not so before, which took time of the tribunals due to need of
translation (30 days in legislative text). This caused delay and thereby not
complying with basic objectives of arbitration.
1.3.2. Parties can now seek assistance from the Swiss courts, even when the arbitration
does not specify the seat of arbitration. Previously, it was not allowed. E.g., if
we consider India’s point of view, if there is an International Commercial
 Arbitration (one party is not Indian), and it has been specified that seat is UK, Commented [SP4]: Section 2(1)(f)

and LCIA will administer the Arbitration.

The Indian party can approach the Indian courts to get administrative assistance
or interim reliefs, even though Indian courts have nothing to do with the
arbitration itself. Do the Indian courts have the jurisdiction to do so? Because
on which grounds will the court establish the jurisdiction?
Indian law does not allow the Indian party to approach the court of law. Interim
relief allowed by way of Section 9 A&C Act (2019 Amendment). However, for
administrative assistance, Indian courts will not have jurisdiction by way of
Section 6 A&C Act. Court will not accept such an application, but it is not
unconstitutional.
No provision in Swiss law provides for minimum interference of the courts.
Interference and intervention –
Interference: Assistance by courts is not interference.
Intervention: Assistance by courts is intervention.
1.3.3. Parties have a duty to immediately object to procedural errors, i.e., for e.g.,
Tribunal does not proceed with the laws decided by the party, otherwise
waiving their right to do so at a later stage.
1.3.4. Awards challenged would be to the highest court of the country and the Federal
Supreme Court (for domestic and international, HC and the SC respectively).
In India, if you receive domestic arbitration award, the High Court would have
jurisdiction. If it is an international commercial arbitration, one will have to go
to the Supreme Court. In Switzerland
1.4.International arbitration is executed – Chapter 12 would apply to International
Arbitration only. Earlier, it was that the act would apply to an International Arbitration,
which depends not only on the domicile of parties to the arbitration agreement, but also
to the domicile of parties to the arbitration (parties to the conflict). Party A and B are
from same nationalities; Party C is from another. If a dispute is between A and B, it is
not an international arbitration. If it is between A and C, it is international arbitration.
There existed difficulty in interpretation.
 Now it says that it should not only be the parties of the arbitration, but it equally applies
to the parties of the arbitration agreement as well. Now it applies to domestic arbitration
as well. They have removed difficulties in further interpretation.
1.5.Swiss court can appoint an arbitrator, even without a specified seat. No laws are written
by the parties (benefit of the doubt), it will apply. If law is specified, then it will not
apply. Disagreeing with such an appointment would be very expensive to go against.
In Indian law, this is not the case. The court will not appoint an arbitrator in the absence
of an arbitration agreement.
1.6.Correction or explanation or completion or additional award (terms used by Swiss
legislation, additional award used by UNCITRAL Model Law as well) - Additional
award is not a second award. The parties submitted issues, documents exhibited by the
Tribunal and are finalized, but at the time of the award, the evidence was not included
in the final award (might have been considered). Based on application of a party, the
Tribunal will pass an additional award. No new facts will be taken into consideration.
This excluded evidence will then be included in the award. It will be treated as a final
award itself.
1.7.Reasons which are given by the Arbitrator would not be challenged. One may challenge
the award, but not the reasons.
1.8.Appointment of Arbitrators by the Swiss courts can be done when the seat is not
mentioned or unclear.
If there is no clarity as to the applicable law to decide the validity of the arbitration law,
model law is usually applied. Distinct in Swiss law.

Valid Arbitration clause:

Arbitration agreement does not depend on signing of the agreement. Even oral arbitration
agreements can be valid.

Consented to Arbitration, i.e., intention of the party is to submit the dispute to arbitration, would
make it a valid arbitration agreement.

2. Arbitration in UK – ff
 3. Arbitration in France –

They have a supranational mechanism in Europe. It implies that the domestic law would depend
on the regional mechanism. The laws of other nations in the region will be similar. France hasn’t
adopted Model Law, and has its own mechanism. ICC is based in Paris. France has an observer
status to Model Law. France is arbitration friendly. Interpretation is different.

(https://www.lawyersfrance.eu/arbitration-court-in-france)

3.1.There are many international conventions that France is a party to, for e.g., New York
Convention, ICSID, etc. But they are not party to UNCITRAL Model Law.
3.2.They generally prohibit appeals in Arbitration.
3.3.They have two different procedural laws on domestic (Code of Civil Procedure) and
international (Civil Code) arbitrations.
3.4.Since it follows a supranational mechanism, if there is any dispute regarding financial
matters which influence other nations in the region, it is considered international in
character.
3.5.EU (47 Members) and Council of Europe (27 Members) – If there is an arbitration, the
two aforementioned documents will be followed.
3.6.A dispute that deals with the limitation period for arbitration subject matter, is 5 years,
irrespective of domestic or international arbitration. UNCITRAL has lesser period of
time, in India, it is 3 years as per Limitation Act, 1963.
3.7.The countries which are following model law, they don’t have the optional clause
rights.
For e.g., Two Indian parties writing a valid arbitration clause, the parties are excluding
the jurisdiction of the court to decide the dispute? Ans. The sentence is incorrect.
Section 5 r/w Section 8 A&C Act, minimum interference of the courts is the
principle, and not excluding the jurisdiction itself. Therefore, the role of court is
minimized.
One empowers the Tribunal, not remove the Court. Unless objected by the defending
counsel, the court will continue a litigation. However, the valid arbitration clause does
 not allow parties to go for litigation. Therefore, parties will have to go to arbitration.
Therefore, even this argument cannot justify excluding the jurisdiction of the court.
Optional dispute resolution clauses provide that the part before the first instance
(include from link)
Here, when there is an arbitration agreement, first they can go to the court. Parties are
not barred from going to the court. Going to court is considered a part of the arbitration
procedure itself.
If valid arbitration clause - In India it is mandatory, whereas in France it is optional.
(recheck)
3.8.This jurisdiction does not recognize anti-suit injunctions. In France, the local courts Commented [SP5]: An anti-suit injunction is an injunction
ordering a party either not to commence or not to take any
cannot grant an injunction to restrain the proceedings started in breach of an arbitration further steps in proceedings in another jurisdiction

agreement. This is not the same in Model law, India recognizes such orders.
In a subject matter of arbitration, a party files a suit. Court realizes there is an
arbitration, and passes an order to the parties to go to arbitration only. This is an anti-
suit injunction i.e., denying the suit or continuation of it before the court because of the
arbitration.
In India, the court will raise their hands when there is an arbitration clause. No suit,
you go with arbitration. Under A&C Act, Section 5 is the Reason and Section 8 is the
Action.
This is not recognized in France. Even if you have a valid arbitration clause, you can
go to court. Court will advise you to go to Arbitration.
3.9.Group of Companies doctrine in arbitration – It means that if there are 5 main
companies, all are doing similar functions incorporated under different State laws and
are considered as main companies in their respective jurisdiction. Independent in
management, but interlinked. If 2 out of 5 companies have a dispute in arbitration and
have an agreement, remaining companies will not be considered as non-signatories,
and will be included in the dispute.
The third party companies belonging to the same group of the company as a party to
the arbitration agreement, can join an arbitration (usually applies to investment
arbitration).
 In UNCITRAL, the rule isn’t very clear. They are considered as non-signatories only.
But after the amendment, they can now be parties to the arbitration and the award will
be binding on them also. A and B are signatories, and have received an award which
affects C. Since it will affect C, C will also be considered as part of the agreement (and
not the conflict).
In certain circumstances only (sir didn’t explain)
3.10. A known party to an arbitration agreement (non-signatory) can compel a party to
an arbitration agreement to arbitrate the dispute under that arbitration agreement, even
though this known party is not a party to it. This is due to the rationale that the dispute
affects this known party. It is a matter of right due to the use of the word compel.
The transmission of arbitration clause, unless the arbitration clause transmits, the
known party won’t be able to enforce its rights. This is possible under the group of
companies doctrine.
There is a main contract among the companies, which further subdivided.
3.11. Disclosure on impartiality of arbitrators: There is an obligation on the arbitrators to
disclose if there is any possibility of partiality or creates a doubt. For e.g., the arbitrator
was a counsel of the company, holds shares, etc. This was also clarified by the French
Court of Appeals in 2002.
3.12. Arbitrator removal: Unanimous decision taken by the parties to remove the
arbitrator is allowed. The Arbitrator responsible for the administration of the arbitration
will remove that arbitrator. Or if he is the arbitrator to be removed, a Judge will get
involved.
In India, Section 13 is a slight different. If a party raises a doubt, the arbitrator himself
will decide if he is bias or not. This is due to Sections 16 and 17 Kompetenz-kompetenz.
Party will have to wait till the award is passed, and only then the award can be
challenged on that ground, i.e., bias. The order declaring that the arbitrator is not biased,
is not an interim award. And hence, cannot be challenged. Such an objection has to be
raised during the proceedings, otherwise the right is waived once the award is given.
3.13. In France, the parties determine the procedural rules. Under UNCITRAL, default
rule is that he may follow the procedural laws of the State but it is not mandatory.
 If the arbitrator follows default rules in France, (i) order necessary investigative
measures; (ii) he may compel to appear to question on any persons, parties or witnesses.
(iii) He can also compel the parties to disclose any documents.
These 3 are part of civil procedure. Autonomy will sustain if there is no mandatory
application of default rules. These 3 default rules exist in civil law because they don’t
have the concept of discovery, which is not the case in common law countries. The
procedure of the country where the contract is made, that must be taken into account.
3.14. In France, in domestic arbitration, proceedings are subject to confidentiality. In
international arbitration, this must be mentioned by parties explicitly. There is no
default confidentiality in international arbitrations in France.
Confidentiality is in 3 layers – Between 2 parties, between the Tribunal and one party,
and the Arbitration and the public.
3.15. In France, there is a specific provision on digital arbitration. India does not
have such a provision.

16th July, 2022

(missed start)

Curial law is different from the law governing arbitration agreement.

Ad hoc arbitrators are found more in Asian countries, including India. India is trying to establish
and improve its own institutions such as MCIA [Mumbai Centre for International Arbitration], etc.
Retired judges are usually appointed as arbitrators by the courts in India.

• The cost of Ad hoc arbitrations, including the fees paid to the retired judges, making it
expensive.
• Benefit of having ad hoc arbitration is that there a lot of autonomy of the parties as
compared to institutional arbitration.
• In ad hoc arbitrations, the tribunal does not get any administrative assistance.

(Refer to comparison sent by sir)

Important: LCIA Rules 2020, ICC Rules, HKIAC Hong Kong Rules, SIAC Rules, UNCITRAL
Rules (Ad hoc arbitrations) [Curial law or institutional rules]
No possibility of having contradiction between UNCITRAL Model Law and Model Rules.

Commencement of an arbitration: (missed meaning)

• Commencement is important to see the limitation period.

• From which date will the compensation and interest to be paid.
• If the proper notice is given or not.

Refer to the table in the email alongside the following:

LCIA ICC HKIAC SIAC UNCITRA

L
Commencemen Article 1 Article 4 Article 4 Article 3 Dispatched
t The date the The date the The date The date the
(Proceedings/ Request is Request is the Notice Notice is
Arbitration) received by the received by is received delivered to
Registrar of the the by the the Registrar.
Commencemen institution. Secretariat. HKIAC.
t of arbitration (Electronic
proceedings (When the parties delivery of
(institution/ request, based on the notice. If
registrar will their agreement) the notice
decide) is goes to spam
different from folder, will it
commencement be
of arbitration considered?
(once arbitrator This is why it
is appointed). says
delivered, and
it is presumed
that the other
party has
received it).
Deadline for 28 days from the 30 days 30 days
response date of from receipt after the
(Response by a commencement of request parties
party to the by the
Tribunal) Secretariat
Default No.
Two arbitrarors
will decide
subject matter,
but model law
says can’t be
even in number.
Since parties
mentioned 2, it
will not
invalidate the
agreement. If
the 2 arbitrators
pass an award,
under Article 10
Model law,
award will be
invalid since
arbitrators no. is
uneven and
principle of
majority will
not apply.
Hence the
award will be
liable to be set
aside.
Challenging an
arbitrator
within 14/30
days of day of
appointment
after finding
conduct or as
per Model Law
Article 12.
Or
As soon as you
come to know
about it.

Any
administrative
decision/functio
n undertaken by
the Tribunal
declared in the
form of an
award,
automatically
remains binding
in nature.
Known By posting I want 2 SIAC Rules
payment of the bank die. Which 37
cost and guarantee. color? Tribunal has
advance on cost Where can the power to
I push you issue an
from? award for the
In practice, unpaid cost of
once party the
approaches the arbitration.
institution, they This is
have to pay the binding in
fees. nature and
They will not enforceable in
initiate the court.
arbitration
proceedings
unless the
parties pay.
Usually in
India,
Arbitrators
charge based on
per sitting.
Confidentiality Parties agree to Proceedings No party Key phrase Hearings
Any act ensure that legal and may matters would be
committed by disclosure is settlements publish … relating confidentia
the party should covered under are (copy from to…and l, and
not entail any confidentiality confidential table) awards. award can
criminal but criminal in nature, During be made
liability. If there liabilities cannot and can be enforcement public
is any be protected. extended to proceedings, under the
obligation on enforcemen non- court of
the parties to t. Once an disclosure law.
disclose any award is and
information on passed, the confidentialit
criminal rules will no y is extended
liabilities, the longer till the
confidentiality applied. enforcement
won’t protect it. of the award
If any act for 14 years.
contradicts the SIAC takes
law of the seat, this guarantee
and if the matter only for
goes to criminal Singapore
courts, for the courts.
purposes of
witnesses, no Confidentialit
arbitrator can be y clause
called as applies to
witness. non-
signatories as
well.
Timeline for 3 months 6 months, No set
issuing award and it extended timeframe.
should go to upon the
Timeline can be registrar reasonable Model Law
extended. grounds by has framed
Discretion is not the court r a timeline,
on the Tribunal, read but Model
and the parties Rules
consent may be hasn’t
needed.
Additional Interpretation On
award, or correction application/
Correction and or additional request of
interpretation of award, the parties,
Award Tribunal may within
pass within 30 specific
Usually days from the days.
tribunals can date of award.
pass additional Extension of
award. time period
No new facts or by arbitrator
arguments are is possible.
taken into
account.
Tribunal does
not use its
discretionary
power, and it is
part of the
original award
passed. It falls
within the
definition of
award itself,
and same role as
original award.
Extension of
time is
requested from
the Registrar/
Secretary/
Institution/
Centre as it is an
administrative
function. Parties
are not
involved.
Additional
award is not
considered as an
interim award.
Expedited Tribunal may Expedited 25 Million Based on
Procedure make any procedure HK Dollar application
procedural order rule may
There in Model it may consider apply if the
Law as well. appropriate. amount
Amendment in does not
1996 Act. exceed
“Emergency”, $200,000
“Fastrack” and
“Expedited” are
all different.

Fastrack – 1996
Act Section
29A. No. of
days are
provided for
every stage.

Discretionary
powers
exercised under
the Rules and
Legislations are
different. If
rules (missed)
Summary The Tribunal has No Without Without merit No
dismissal express powers to summary merit or or manifestly summary
provisions summarily dismissal manifestly outside dismissal
dismiss issues provision outside tribunal’s provisions
Whether the that are tribunal’s jurisdiction.
trial court have manifestly jurisdiction
jurisdiction to outside the .
read merits and jurisdiction of
circumstances tribunal.
in a summary
trial? E.g., subject
Yes, go through matter is
the pleadings of arbitrable, but
the party. parties have not
agreed to
Not so in arbitrate that
arbitration. If particular matter.
arbitrator could This issue would
not decide the be dismissed.
facts or
circumstances,
as in does not
have
jurisdiction,
they will be put
outside their
arena. Hence,
summarily
dismissed.
(Disposal –
Merits looked
by court
Dismissal –
Court does not
have
jurisdiction to
look at merits)

Interim Order or an Order or an

Measures prior Award passed… Award
to constitution which the passed.
of Tribunal Tribunal could
make.
By paying an
additional (Such an order
charge, the requires the
party can ask for constitution of
it. Party, by way the Tribunal, and
of application, hence it cannot be
requests the final and binding.
institution. The It is just a
registry will decision on an
appoint a interim
temporary sole application. An
arbitrator, and a emergency
necessary order arbitrator cannot
will be passed. pass a final order
He may, but not before
necessarily, be a constitution of
part of the the Tribunal)
Tribunal that is
set up.
(Sole arbitrator
may also be 3)

Interim
measures are
not awards
since an Award
requires the
constitution of
Tribunal. It will
always be an
order passed by
a sole arbitrator.
Interim The Tribunal has
Measures after the power to
to constitution order…provision
of Tribunal al relief if
required.
Can be
considered as an
interim award,
as well as a final
award based on
the
circumstances.
Arbitration cost

(including fees)
Change PDF
Default The arbitrators The The No provision. No
restrictions on cannot be from arbitrators arbitrators provision.
arbitrators nationalities of cannot be cannot be
where parties the parties. from from
with different nationalities nationalitie
nationalities of the s of the
parties. parties.
This rule can be
waived.
 However, a
party cannot
make tailor
made rules.
Once institution
is selected, rules
are to be
followed
mandatorily.
Joinder of the Only on 3 aspects Request by
parties application by a party, and
party and consent only if third
[Read article: of applicant and party is a
Joinder and new party signatory to
necessary required. the
parties in arbitration
Investment Consent is agreement.
Arbitration essential.
(Kluwer (India has
Online)] (Non-signatory amended
can make an and now
application as allows)
well)
Consolidation Subject to
approval by
Consolidation is institution
only allowed
when the other
tribunal has not
been constituted
(res sub judice
will apply).
Confidentiality clause is different from non-disclosure clause (will discuss later). For the purpose
of curial law, it is similar.
 MODULE 2 – DOMESTIC ARBITRATION IN INDIA

Arbitration and Conciliation Act, 1996 [“1996 Act”]

3 Amendments – 2015, 2019 and 2021

Similar legislations apply across all the domestic legislations of most countries, since it is based
on the UNCITRAL Model Law.

Objectives of International or Domestic Arbitration, Conciliation and Mediation are very different.

• Originally, objective was to reduce the burden on courts by diverting litigants to these ADR
mechanisms.
• By properly propagating this mechanism, we could have reduced the intake of cases in
court, thereby relieving them from excess burden.
• If parties are diverted to these mechanisms, they would be less likely to come to court in
future, in contrast with the appeal mechanisms in the court system. Arbitration is binding
and final. Overall, it will be beneficial to court of law.

____ CPC was introduced, court annexed arbitration and mediation. Those cases pending before
any court can be diverted to arbitration and mediation by the consent of the parties under these
court annexed institutions. Parties do not go for appeal since it is not appealable.

Major goal was to reduce burden on the courts. Now we are more advanced, with a commercial
and investment focus, apart from other areas and disputes. Most contracts have such clauses to
resolve disputes.

30 July 2017, a committee report was submitted by Justice RV Ravindran, and many more, but
is still pending. This report is not in public domain. A letter was written by the authors to publicize
it, but it has still not been made public.

3 main points were highlighted in this report –

• How to make the curial law more effective in nature – reform of ICADR (add full form).
• How to make institutional arbitration more effective in India
• Role of arbitration in Bilateral Investment Treaties. In 2015, Model BIT of India removed
MFN, which was highly criticized by the international community. Commented [SP6]: In light of White Industries Case

Check PRS for amendments on Delhi Centre and ICADR.

Legal Structure –

The 1996 Act. We also have the Amendment Act 2015 and the Amendment Act 2019, and latest
is Amendment Act 2021.

Section 43A

Amendment Act 2019 –

i. Composition and constitution of Arbitration Council of India (ACI), and functions of

the ACI. Nowadays, highly debatable between all stakeholders including law firms
(primarily 3 law firms NDA, SAM and L&L). Till now, hasn’t been constituted. ACI
influencing international arbitration is under discussion, which has to be resolved.
ii. Appointment of arbitrators – Legislations had decided qualifications of arbitrators,
which made it very difficult for many to become empaneled under an institution.
Criticized that young practitioners couldn’t be arbitrators. (removed in 2021)
iii. Relaxation of time limit – Domestic arbitration was 1 year with 6 month extension. It
was also said that this would be applied to international arbitrations. However, it was
criticized by international arbitration. Now, no time limit for ICA.
iv. Completion of written submission – Majority of the time consumed by written
submissions and allied tasks. Now time limit is 6 months to submit everything to the
arbitrator, except evidence that may come up later.
v. Confidentiality clause was introduced.

AMENDMENT ACT 2021

i. Automatic stay of awards – Before the 2015 Amendment, there was an automatic
stay, i.e., as soon as one files an application to set aside an arbitration award (missed).
At the time, parties were not required to file an application (missed). First order of stay
had to be granted, and then the set aside proceedings could be started. Jurisdiction
would only come when proceedings were stayed, as per judicial interpretation. There
was no automatic stay. Separate applications were needed. This is technically a
clarification so as to avoid any further challenges. There was no original provision
about automatic stay, but the need for separate application was due to judicial
interpretation. [Section 34 of 1996 Act]
 Problem was that without a stay, while set aside proceedings were going on, the
execution of the award could be done.
Post 2015, by way of interpretation of courts and then 2021 Amendment, there will be
presumption of automatic stay only on 2 conditions (no need to file separate application
of stay under these conditions)-
-No fraud or corruption allegations made about the agreement and the award.

1996 ACT

• Short title and commencement, etc – Section 1

• Definitions clause:
a. “court” – territorial jurisdiction and jurisdiction of the subject matter. Principal
district court, e.g., GNLU campus dispute, and parties decide to arbitrate. If any
stay or interim relief is required, the assistance of court will be taken. As per
definition, the district court of Gandhinagar will have jurisdiction. No court
inferior to District Court will have original jurisdiction to the matter. Further,
territorial and subject matter jurisdiction will be applicable. If no district court is
functioning, the State’s HC having ordinary, original and civil jurisdiction that the
HC has.
Once tribunal is constituted, if any administrative assistance is required under
Section 6 from the court, whether should you go to the same court or any other
court (HC having original civil jurisdiction)?
In practice, counsels prefer approaching the SC directly since resolution is quicker.
b.

25 July 2022

• Sections 2(1)(e) and 42 ACA should be read together. Section 42 ACA defines the
jurisdiction of the Court and comes under Part I. All arbitration proceedings and all
subsequent applications arising out of the agreement come under the jurisdiction of the
Court as defined u/s 2(1)(e) ACA. If two different courts have jurisdiction, the Court
which is approached first will have jurisdiction as per the rules of Res Sub Judice.
• Section 2(h) defines “party” as a party to an arbitration agreement. This must be r/w s. 7
ACA which defines an “arbitration agreement”. The arbitration agreement has to be in
writing. If the agreement is in the main contract, requirements of s. 7(3) must be made. If
the agreement is separate, requirements of s. 7(4) must be met.
• Part I will apply when the place of arbitration is in India. Place is defined u/s 20 ACA. In
an International Commercial Arbitration, if the place is in India, Part I will applied to the
proceedings as laws of India will apply thereto. An award passed in an arbitration seated
in India is a domestic award, Part II will not apply. An award passed u/s 2(7) ACA is a
domestic award.
• As per the proviso of s. 2(2), certain parts of Part I, i.e., s. 9 (interim measures by courts),
s. 27 (Court assistance in taking evidence), and s. 37(1)(a) and s. 37(3) apply to foreign
seated arbitrations as well unless specifically excluded by the parties in the agreement
(2015 amendment).
• Disputes that are not arbitrable will not be governed by Part I (s. 2(3)). As per a SC
judgment, a foreign award arbitrable in its seat but not arbitrable in India was enforced in
India.
• S. 3 ACA talks about receipt of written communication. Written communication is deemed
to be received if it is delivered at the residence/place of business of the recipient. It is
deemed to have been received if sent to the last known address if the current address cannot
be found upon reasonable enquiry.
• S. 4 ACA is on the waiver of right to object. A waived objection may be raised at a later
stage if the other party does not object to the same.
• S. 5 ACA states that judicial intervention shall not take place unless specifically provided
for in the Act.
• S. 7 defines the arbitration agreement. An arbitration agreement is in writing if it is
contained in:
a) a document signed by the parties;
b) an exchange of letters, telex, telegrams or other means of telecommunication including
communication through electronic means which provide a record of the agreement; or
c) an exchange of statements of claim and defence in which the existence of the agreement
is alleged by one party and not denied by the other.
An arbitration agreement sent by a party via written communication but not denied by the other
party is a valid arbitration agreement.

26th July 2022

Section 7

Claim and reference here is not on the merit. It is initial stage, when one party intimates the other
that there is a valid dispute, and hence will appoint an arbitrator. This is done by way of notice.
The counsel of the party initiating the arbitration will send this notice. No denial of or no response
to the appointment amounts to acceptance of the arbitration clause.

In practice, sometimes parties may take to court. Here it will move from Section 7 to Section 8.
Then the court will check validity of contract and other issues.

Last sentence of Section 7 is important. If arbitration clause says that a particular matter is to be
resolved by arbitration, then it will be resolved by way of the mentioned conditions. That
arbitration clause will be valid for the dispute that may arise based on the mentioned conditions.
In this manner, it is part of the contract.

In the context of jurisdiction to the arbitrator based on the arbitration clause, the arbitration clause
is separate from the main contract. For instance, if a contract is voidable or void ab initio, it would
lead to the arbitration clause being voidable or void ab initio as well. This is why arbitration clause
is separate in jurisdictional matters. This is governed by the doctrine of separability. Commented [SP7]: Blue pencil test of Advanced Contracts
Wohoo
7(5) (r/w with Section 16 kompetenz kompetenz) is for the validity and existence of the arbitration
clause. Context is very important when determining whether arbitration clause is part of the
contract or not.

Section 8

When a real dispute arises, and one of the parties do not want to arbitrate despite having an
arbitration clause, Section 8 has 3 relevant aspects:

Section 8 gives the parties a green signal to initiate (and not commencement) the arbitration. When
there is a valid arbitration clause in the contract, then there is an exclusion of the jurisdiction of
the court.
Two perspectives:

A party inserted a valid arbitration clause. This implies that the jurisdiction of the court is excluded.
Section 8 says it is a peremptory norm, i.e., the court will send you back to the Tribunal. Section
8 does not prevent the party to approach the court, even if you have a valid arbitration agreement.
Hence, the interpretation that inserting a valid arbitration clause in a contract excludes the
jurisdiction of court is not appropriate.

A counter argument is that, when one inserts an arbitration clause, the constitutional right to take
the jurisdiction of the court and approach the court, cannot be taken. Hence, it cannot be said that
the court’s jurisdiction is taken away. When parties go to court, under Section 8, the court goes
through relevant conditions and then sends back to Tribunal if appropriate. (Missed a little) Section
8 invites you to go to litigation even if you have a valid arbitration clause, under the condition that
the other party should not raise any objection to the same. Effectively, the party agree that they
have a valid arbitration clause, and one party wants to go for litigation instead, as long as the
other party does not object to it, the litigation can go on. Hence, the jurisdiction of the court is
not excluded.

[Any written statement on merit or a particular circumstance (even a simple affidavit), filed before
the court of law by the other party, this would amount to the presumption that despite having a
valid arbitration agreement, it amounts to the acceptance to proceeding with litigation.]

Both sets of arguments have SC cases (will discuss later)

Sir’s interpretation, since arbitration clause is voluntary in nature, the parties themselves
are taking away their right to approach the court in favor of the arbitration. Hence, there is
no violation of constitutional rights.

Appealable orders

For instance, a court refuses to send parties to arbitration, the party which is aggrieved by this
order can appeal the same under Section 37.

Section 37 – Appealable orders

(1) Notwithstanding anything contained in any other law for the time being in force, an
appeal shall lie from the following orders (and from no others) to the Court authorized by
law to hear appeals from original decrees of the Court passing the order, namely:
 (a) Refusing to refer the parties to arbitration under section 8;

(b) Granting or refusing to grant any measure under section 9;

(c) Setting aside or refusing to set aside an arbitral award under section 34.

Section 8(2) – The court will first decide its jurisdiction before entertaining Section 8(1). Here the
court will first check the validity of the arbitration agreement. For this, the court will require the
certified copy of the agreement.

When the application filed under Section 8, it may take time to dispose of the application, the
parties are allowed to continue with the arbitration proceedings. But in practice, the party which
opposes the arbitration, does not prefer to proceed with the proceedings. They may resort to not
completing basic procedural requirements such as not appointing an arbitrator.

Section 25 default of party – cooperation at initial stage and non-cooperation at a later stage.

If after Section 8 proceedings court sends the party back to arbitration, but an ex parte award has
already been passed, this default award will be valid and binding on both parties.

Generally, in procedural law, there is no distinction between may and shall. Meaning usually
differs in substantive law. Judicial authority is written where administrative matters are mentioned.
Interim measures, court is written. In Section 8, court is not written. Court is used once the
litigation is initiated.

Section 9

Order 39, order passed by the arbitrator under Section 9 is similar. Powers vested by the court in
interim orders, and the powers of arbitrator to do the same, are at par. Section 9 (court passes
interim relief), Section 17 and Order 39 CPC (interim orders) are equal in terms of power. While
executing, the powers are same as well. In all these 3 provisions, 3 basic principles are considered,
i.e., prima facie, balance of convenience, and irreparable injury.

Parties approach in 3 stages under Section 9:

• Before you constitute the Tribunal, you can approach the court to get an interim relief. One
of the distinct reliefs is Section 9(1)(2)(b) – Securing amount of dispute. Immediate relief.

[Add provision]
 • During the arbitration proceeding at any time, you can get interim relief. If the powers are
left to the Tribunal, how far is it justifiable in the subject matter for the court to pass an
interim relief? In such cases, the court will not entertain you, and the court will ask you to
go back to the Tribunal instead for interim relief.
• Even after the award is passed, and before the execution and enforcement, the parties can
go to court for interim relief.

If the court’s response is that the interim relief is being granted, which will aggrieve the other
party, that aggrieved party can file an appeal against the order under Section 37(1)(b).

[Add provision]

In practice, one would go to the principal district court first. In appeal, one would go to the High
Court under Section 96 CPC, i.e., under Section 37 A&C Act, we are approaching the court. CPC
is used to approach the court, i.e., the appellate court. CPC gives courts the jurisdiction.

1st August 2022

(Missed start)

Section 10

Section 11:

[Add provision]

Appointment of an Arbitrator: If nothing is written in an arbitration agreement, a sole arbitrator is

appointed who would decide the entire matter. If something on this is written, a 3-arbitrator panel
is established where each party appoints an arbitrator, and they appoint the third arbitrator. If any
party or the 2 arbitrators are unable to, then the parties may approach the court to appoint an
arbitrator.

Domestic Arbitrations – Only HC has power.

ICA – Only SC has power Commented [SP8]: After 2021 amendment

The power to appoint arbitrator by the court is an administrative function. Supreme Court will refer this to institutional arbitration

2 judgments – first judgment stated that it is a judicial power. If it is a judicial function, then CJ High court will refer this to institutional arbitration

cannot delegate the power. However, the legislation states that it can be delegated. This was then
If nothing, respective courts will appoint the panel of
arbitrators themselves
overruled, and it was held that it is an administrative power. The CJ can delegate the power, and
is not allowed to look into the merits of the case while appointing. The legislation was then
amended, and Section 11(b) clarified that it is an administrative power.

Even though 60 days are given under Section 13, the court has been given with discretionary
powers under this section, since court is usually unable to appoint an arbitrator within this time
limit (as expeditiously as possible). In practice, it is not less than 4 months to appoint an arbitrator.

Structure of Fees is written in the 4th schedule. It is binding to follow, but it is generally a guiding
principle. There are ways that it may not apply to ad hoc arbitrations.

Section 12:

Grounds for challenge of an arbitrator:

i. If Section 12 r/w Schedule 5, Section 12 creates an obligation on a likely appointed

arbitrator, he must disclose any possible relationship with either of the parties. The
form is given in Schedule 6. Examples may include acted as a counsel for a party, is a
shareholder in either of the party’s companies, he was a witness in one of the cases
involving a party, etc. All this must be disclosed. This obligation has been created.
Sub-clause (a) [Add here]. Or others include any personal relationship of an individual
as well, which is likely to give justifiable doubts to his independence and impartiality.
Sub-clause (b) [Add here]. Only an appointed arbitrator who has acted as counsel or
arbitrator previously for either of the party, does not by itself imply that he is not
eligible. This is not sufficient grounds to challenge – which is likely to create justifiable
doubts. The mere statement is not enough that he acted as counsel or arbitrator, it must
be proven that he would not be independence or impartial. There must be an act which
creates a doubt. During arbitration, if the arbitrator acts otherwise, the objection can be
raised and it can then be challenged.
If a party has doubts on independence and impartiality before appointment, then
consent will not be given in the first place.
ii. (b) clause – inability to complete the arbitration on time or devote sufficient time,
thereby should withdraw from the arbitration. Schedule 5 r/w Section 12(1)(b). It is not
optional, and is mandatory.
 iii. 2 grounds on which a party can file an application – First, independent and impartiality;
and second is qualification. If both or either of the conditions are not satisfied, an
application can be filed.
iv. Clause 4, only for reasons that the party becomes aware after the appointment has been
made. Clause 5, any person whose relationship to parties or counsels falls under any of
the categories under Schedule 7, would make the arbitrator ineligible. Ineligibility does
not mean disqualification. If the parties want, they can still appoint an arbitrator who
is ineligible, i.e., ineligibility can be removed by the consent of the parties. Section
12(5) r/w Schedule 7, and Section ___ r/w Schedule 5. Ineligibility cannot be
considered under either of the 2 grounds mentioned in Section 12(3). It has also been
separated in Fifth Schedule and Seventh Schedule.

Section 13:

Challenging Procedure:

Sub-clause 3, the arbitral tribunal shall decide a challenge to any of the arbitrator when
circumstances arise as to justifiable doubts. If arbitrator says no that he is not biased, and he
continues the arbitration and passes an award (Sub-clause 4). Sub-clause 5, award is passed and
the party challenging the award may make a challenge under Section 34.

Sub-clause 4, if the challenge is not successful then the Tribunal shall continue with the arbitration
proceedings and pass the award.

Sub-clause 5, where the award is made under sub-clause 4, one party will remain aggrieved. The
party challenging the award may make an application to set aside that award under Section 34. The
party can’t appeal the order itself at the stage, and will have to challenge after the award has been
made.

Under 34(2)(b)(ii) Explanation 1(iii), the award can be challenged “it is in conflict with the most
basic notion of morality or justice”.

The opportunity is not given at the stage and only after the award is passed? In order to expedite
the process, thereby achieving the objective and purpose of the A&C Act. Interpretation of any
provision must be done keeping in mind the objective and purpose of the act.

Sections 14 & 15:

Failure and impossibility of the act; and termination of mandate and substitution of arbitrator.

For instance, an arbitrator is unable to perform the duties within stipulated period of time and
hence wants to withdraw his name, or ill health, or any other impossibility. If he withdraws,
mandate will be terminated. It would not imply termination of arbitration proceedings under
Section 32. Under Section 32, proceedings are terminated after the award when the arbitrator has
nothing to adjudicate upon.

In case of withdrawal, a new arbitrator will be appointed. The newly appointed arbitrator will have
the option to either start the proceedings afresh (not arbitration), or continue from where the
previous arbitrator left. If he prefers to begin it afresh, any earlier orders passed by the tribunal
will not be invalidated, and will be valid. The new arbitrator will not have a jurisidcition to interfere
with those orders. The autonomy to start afresh is regarding the proceedings only, not with the
adjudication itself. This will not be applicable if the arbitrator is disqualified under Sections 12 or
13 [This is the major difference between Sections 12 & 13, and Sections 14 & 15].

In ICA, if the arbitrator who has withdrawn had given an interim award, this award will have to
be implemented, and the new arbitrator cannot interfere with this award.

Section 16:

The court functions decide their own jurisdiction on all 3 aspects – pecuniary, territorial and subject
matter jurisdiction. Same powers are given to an Arbitral Tribunal under this section, but this is
given to the tribunal by the agreement of the Parties. However, is the contract itself is voidable or
void ab initio, how far will the competency of the tribunal on jurisdiction will be?

i. When we write conditions in a contract, it creates rights and liabilities for the parties.
While writing the arbitration clause, it does not create any rights or liabilities. Hence,
even if the arbitration clause is part of the contract, the nature of the clause is different.
ii. Model Law states that even if parties’ consent to resolve disputes by arbitration, parties
have the opportunity to litigate the matter despite there being a provision for arbitration.
This is not possible under the agreement since it directly violates it. Hence, the
arbitration clause has to be read separately.
 iii. Arbitrator decides its jurisdiction on the validity of the agreement, thereby looking into
the intentions of the parties. Arbitrator is not at the mercy of the parties, and the clause
giving consent and mandate to the arbitrator is enough. 2 principles:
a. Doctrine of Severability or Separability or Competency, i.e., independence of an
arbitrator, the arbitrator has to detach himself from the contract. He receives
competency by reading the validity of the arbitration agreement.
b. Doctrine of kompetenz kompetenz, i.e., existence and validity of the agreement is
looked into.

Both these principles are inseparable.

Taken verbatim from model law. Three aspects;

i. A and b, these 2 principles are written.

ii. Clause 2 and 3, both circumstances appeal can be filed under Section 37. The
proceedings will not continue in these circumstances, since the Section does not
mention or allow that the proceedings can be continued and you cannot go to the court
at this stage. Parties can go at the very same stage to court. If the tribunal continues, it
can be challenged under Section 34, under Section 16(6).

Section 17: Interim measures ordered by Arbitral Tribunal

One can go to the court at any time before enforcement, to receive an interim relief.

[Add provision]

If interim order has not been followed by the parties, would it be considered as contempt of court?
Since it mentions in accordance with CPC. There is no case where this was considered as contempt
of court. Report of NITI Aayog presents a debate on this. The essential debate was that there are
no remedies available if contempt of court is not there.

This is unresolved.

Section 17 order Amazon case, where emergency arbitration was covered. Based on powers clause
2, it refers to the execution of the award. If award not executed, it would amount to contempt of
court. Party aggrieved can go to court against this.
In terms of “emergency arbitration” is not in Indian law. But provisions can be read indirectly with
emergency arbitration. It is there in legislation, even though “emergency arbitration” is not there.
Provisions - 29(b) Fastrack Award, and interim award is necessarily considered as emergency
arbitration since it provides emergency reliefs.

(Conceptually fastrack mai all points are decided, whereas emergency mai only one point)

Contemporary debate is that emergency arbitration occurs when the tribunal is not established, and
the emergency arbitration is shifted to regular arbitration after the tribunal is established. However,
under Section 17, the arbitration tribunal should have been established, i.e., during or after the
arbitration proceedings.

Section 19 – Determination of rules of procedure

It is a curial law. Clause 1, CPC and evidence law is not binding on arbitrator. Tailor made
evidence law based on consent of parties is followed. Clause 4, admissibility, materiality and
weightage of evidence will also be tailor made. Due to this tailor made mechanism, the reasons for
an award must be explicitly given in writing by the arbitrator. Reasons of an award cannot be
challenged, only the award itself can be challenged.

Section 20 – Place of Arbitration

Venue for domestic arbitration, and ICA where India is chosen. The location is irrelevant, it can
be UP or Gandhinagar. It is not juridical in nature.

Section 21 - Commencement of Arbitration Proceeding

When the request to refer matter to arbitration is received by the respondent.

Section 22

Cost would be borne by both parties in practice.

Section 23

Set off and counterclaim would only be covered that is included by the claimant in the written
submission. Otherwise, new issue should be submitted to the arbitrator, with requisite requirements
including fees. Last sentence is relevant. No subject matter which has never been submitted by the
claimant can be considered as a counterclaim.

Section 24

Usually, oral hearings take place in arbitration, unless parties consent it can be written. In fast-
track arbitration, written form has to be used at each step.

Section 25 Default of a party

• Claimant is non-cooperative; then subject matter would be dismissed since no matter left
to decide. Tribunal shall terminate the proceedings
• If respondent is non-cooperative, ex parte order will be passed.

Section 26 – Expert appointed by arbitral tribunal

Expert when appointed, reasons must be given in the award.

Under no circumstance the reasons can be challenged. It cannot be that the justice is outsourced,
i.e., expert’s determination is taken without applying mind of arbitrator. This is mandatory, unless
otherwise agreed by the parties.

Section 27 – Court assistance in taking evidence

Clause 5 is important – If the order passed by the court and not followed by parties as a subject
matter of case, would it amount to contempt?
Any decision not followed by parties under CPC amounts to contempt. Does it apply to arbitration?
This issue remains unresolved. No such situation has been faced by the courts yet. It is in
discussion in various forums, including 2021 NITI Aayog. Justice Tripathi recently made a
statement on this, stating that it must be considered as contempt and legislation must be
amended.

Section 28 – Rules applicable to substance of dispute

28(1)(b)(2) – The Tribunal and/or parties should select that law governing the contract which could
not attract a Private International Law issue when it is to be enforced. For e.g., witness depositions
in civil law and common law is very different. This would decide weightage given to such
evidence. This would create a problem in executing the award.

Section 29

(r/w Sec 10 (check) )

(missed)

29A – Time limit for award is 12 months, the fees would be deducted. Commented [SP9]: Extendable by 6 more months

Clause 4, second last sentence, penalty and reduction fees Total 12+6

29B(3)a 1.5 years

Section 30

In India we follow mediation first then arbitration usually.

Section 31

Such a mediation would be considered as an award of a arbitrator if succssful, and is binding. If

not followed, the aggrieved party can take you to court.
Sub-clause 3 is important.

MISSED DUE TO BREAK

22nd August 2022

Blue Coast Infrastructure Development v. Blue Coast Hotels (Delhi HC – 10/6/2020)

Law on granting interim relief to non-signatories in an arbitration.

Distinction between the powers of the court passing an interim relief in the subject matter of
arbitration.

Extension of powers to the tribunal. Restricts the power that the tribunal has under Section 17.

No adverse opinion or decision can be given.

Delhi HC here refused to grant relief to non-signatories based on the facts and circumstances of
this case.

Delhi HC held that it was possible to award interim relief against a non-signatory in certain
circumstances.

Practical Implications:

i. The party can go to court of law for interim relief in 3 stages – the court here
interpretated these stages.
ii. .
iii. Non-signatory does not have any role to challenge the qualification of an arbitrator.
iv. By the court only. Control over the property which is the subject matter of the
arbitration.
v. .

Background of case:

The applicant had entered into a JDA with Silver Resorts. It was a special purpose vehicle by Blue
Coast Hotels to develop a commercial space in the New Delhi Airport.

The JDA is relevant.

What did the court decide?

(Slides)

Gemini Bay v. Integrated Sales (10/08/2021 – SC)

Interpretation of Section 48

[2 parts of interpreting this section as per sir]

The SC refused to interfere with an award by a sole arbitrator seated in the USA.

A foreign award could be enforced against non-signatories under the A&C Act.

(Slides)

Practical Implications:

(Slides)

The grounds under which an award can be resisted must be construed narrowly.

(Slides)

…..

23.08.2022

Gemini Bay v. Integrated Sales

• The executing court is not bothered to see if the award is extended to the non-signatories
or not. This is something that has to be examined only at the seat. If the seat upholds the
award, the same will be enforced against the non-signatories as well. The enforcement
court will not look into the merits of the case.

https://www.nishithdesai.com/Content/document/pdf/Articles/Indian%20Supreme%20Court%20
rules%20on%20the%20enforcement%20of%20foreign%20award%20against%20non-
signatories%20(Gemini%20Bay%20v%20Integrated%20Sales)%20-%20Branded%20PDF.pdf
(he has copy pasted the pdf onto his slides)
Messer Griesheim GmbH (now Air Liquide Deutschland GmbH) v. Goyal MG Gases Pvt.
Ltd.

Jurisdiction of court during enforcement of foreign awards is with HC by looking at s. 2(e)(ii) and
s. 44 ACA.

https://www.nishithdesai.com/SectionCategory/33/Dispute-Resolution-
Hotline/12/57/DisputeResolutionHotline/5323/1.html

Messer Supreme 2022 Appellant 25, “The expression ‘District” is

Griesheim Court SCC initiated 30 defined under Section 2(4) of
GmbH v. OnLine proceedings the Code and the term
Goyal MG SC 97 against Res. “District Court” referred
Gases Pvt. before High under Section 44A of the Code
Ltd Court of although not defined, but on
Justice, UK conjoint reading of the
and obtained provision makes it clear that it
a money refers to the local limits of the
decree. UK is jurisdiction of a principal civil
a notified Court of original jurisdiction
reciprocating (provisions of the Code called
country and a “District Court”) and it
the HC was a includes the local limits of the
notified ordinary original civil
superior jurisdiction of a High Court
court. and it is not disputed that
principal civil Court of
Execution original jurisdiction is
filed in Delhi normally a District Court
HC for (with whatever change in the
decretal nomenclature) and the High
amount of Courts in India exercising
INR 99 Cr. ordinary original civil
Res. objected jurisdiction are not too many,
that Delhi but where there is a split
HC did not jurisdiction based on its
have pecuniary value, notified from
jurisdiction time to time, the District Court
in the matter. or the High Court in its
Overruled. ordinary original civil
jurisdiction is competent to
Division exercise power for execution
Bench of decree, including money
overruled it decree of the foreign Court of
and observed reciprocating jurisdiction,
 that provided other conditions are
jurisdiction complied with as
would vest contemplated under Section
with District 44A of the Code.
Court.
“The Division Bench has
Supreme proceeded on the basis of the
Court expression “District Court”,
observed that as being referred under
the pecuniary Section 44A of the Code but it
jurisdiction has not taken into
must be taken consideration the other
into account relevant provisions of which a
and thus on reference has been made by us
this basis while coming to the conclusion
Delhi HC had that the expression “District”
the as defined under Section 2(4)
jurisdiction. of the Code only lays down the
limits of the jurisdiction of the
principal civil Court of
original jurisdiction and that
includes the ordinary original
civil jurisdiction of the High
Court and once the pecuniary
jurisdiction exceeds as being
notified under the relevant
statute, the jurisdiction vests
exclusively with the High
Court as an ordinary original
civil jurisdiction for execution
of a foreign decree under
Section 44A subject to the just
objections which are available
to the parties/judgment debtor
as envisaged under Section 13
of the Code.”

25th August 2022

Case VII – Messer Grisesham

Relevant Background discussion for the case - The provisions in the CPC given regarding
definition, jurisdiction and powers of court, are for the timing of filing of suit. Not for the
execution. Execution proceedings area a kind of a fresh cause as well as fresh proceedings. It is
not considered as a continuation of the suit.

In Execution proceedings generally, a plea regarding jurisdiction is usually not raised, unless a
special law mandates it. E.g., As a counsel, you have a foreign award in hand, and you would want
to go to the District or the High Court. During execution

In this case, the original London High Court stated that the award must be executed in the superior
court of India. However, this does not put this obligation on Indian courts, and they will follow the
relevant laws only. Reading with Section 44(a)(1), this definition of court is only to be read by
filing a suit, and not in any other proceedings.

Automatic jurisdiction is given to the 5 original high courts if the pecuniary jurisdiction of the
relevant district court is not satisfied (i.e., more than 2 Crores). This is given in the High Court
Rules of these 5 courts. This implies that for the other remaining High Courts, there is no pecuniary
jurisdiction. The party would go to the District Court, as the High Court will not have the original
ordinary civil jurisdiction. (Argument made)

This pecuniary bifurcations, i.e., split jurisidiction, is not given in CPC since it applies to all HCs.
This is done by way of the High Court Rules of these 5 HCs.

Section 44(a)(a) CPC, Delhi HC Rules regarding pecuniary jurisdiction (find provision) and the
definition of court under CPC were the relevant provisions in this case.

This debate came in the case because the opposing party alleged that the high court does not have
original civil jurisdiction.

(Slides)

Even though the Delhi HC (in this case, but applies to all 5HCs – Delhi, Bombay, Calcutta, Madras
and Himachal Pradesh - which have specific pecuniary jurisdictions) has original jurisdiction, it
will only be available only when the pecuniary jurisdiction of the District court is not satisfied.

The decree passed by a superior court of another jurisdiction, it may imply that the executing court
in India should also be a superior court. However, this is not to be followed by the Indian executing
courts, and they must comply with the CPC and other relevant laws.
In the event that the rules did not have a pecuniary jurisdiction requirement, and if the foreign
court required the execution to be done in a superior court, then under Section 44 HC would have
jurisdiction. Overall, it should go to HC if nothing is specified in the rules.

Case VIII - Zostel Hospitality Private Ltd v. Oravel Stays Private Ltd & Anr (14-2-2022 Del
HC)

(Slides)
If you have received an award, and you have to approach an executing court. The opposite party
has 2 options – Under Section 34 set aside the order (challenge it, in a time consuming manner
knowing that it will eventually be enforced), or under Section 9 A&C Act (Interim relief) may
approach the court for a stay order after passing the award but before execution.

Use of Section 9 should only be to support the award, and not to destroy it (award of an arbitrator
cannot be destructed since Section 9 is meant to assist the Tribunal). The court only had jurisdiction
to look into only the specific performance part, so as to ensure litigating court follows precedents.

Even after an award is passed, an order after that can still be considered as interim. It is considered
interim because it hasn’t been final yet, i.e., reaches the stage of finality, it hasn’t been executed
and 90 days haven’t passed.

Section 9 “any other” implies wide discretionary powers.

3 conditions under Section 39 CPC won’t work since the award itself has been passed, making it
unnecessary (prima facie, irreparable injury and balance of convenience). This implies that the
court has to read the matrix to decide, which they can’t do since they do not have the jurisdiction
to do this under Section 9.

In this case, there was IPO where specific performance was ordered. The specific performance
was not to be automatic, but had to go through litigating court so as to ensure it follows certain
precedents. The party’s prayer was regarding specific performance right after the award so that the
party could benefit from it. No court in A&C Act (Section 9, 34 or 37) is allowed to look into the
facts. However, this does not mean that you can’t approach the court under Section 9, since it
allows one to approach the court even after the order is passed. The protection granted under this
section is only on technical grounds. In no circumstances can one request the honorable court on
either Stay of any proceedings or take away the restraint imposed by an arbitrator. Therefore, the
order will be passed under Section 9 to reject the application. (It was requested that the IPO be
stopped, so that the award granted to him is not restrained and can be finalized easily.)

Under Section 9, the award debtor can take the time to negotiate the matter. Under Section 34 for
e.g., you have one year. Under Section 34, there is no automatic stay. A separate application needs
to be filed separately. However, under Section 9, only certain part of the award is requested to be
stayed. Section 34 and Section 9 powers are not similar. 34 is executing court whereas 9 is not.
Since it is not executing court, no question of going beyond the decree arises. This position is
unsettled.

In this case, the court stated that obligations regarding specific performance cannot be accepted
under Section 9, thereby rejecting the application.

(Slides)

3rd point – An executing court will not automatically grant specific performance under the award.

Where the award does not specify how or when the award is to be performed, the court cannot do
that either, especially when the condition of consensus ad idem (as per slides) is not followed.
(Possible rationale of the arbitral tribunal, in specific performance, rule of law must be followed.
Since precedents need to be followed, the arbitral tribunal left it to the litigating court. If the award
does not specify how or when the award is to be performed, it is duty of counsel to ask clarification
or ask for an additional award. It is not the job of a litigating court to do this.)

Hence in this case, sir said that the parties misused the provision to delay for as long as possible.

(Slides)

Case IX – Amazon v. Future

(https://www.nishithdesai.com/SectionCategory/33/Dispute-Resolution-
Hotline/12/57/DisputeResolutionHotline/4799/2.html

Section 17 talks about “order” and not “award”.

If one is aggrieved with the decision under Section 17, one can approach the court in appeal under
Section 37(2)(b).
LCI recommended that definition of arbitration be amended to include emergency arbitration. It
was however not incorporated in the 2015 amendment, which was then criticized as indicating that
India ais not an arbitration friendly state.

In this case, the court stated that emergency arbitration can be recognized under Section 17 if it is
recognized in the curial law.

Emergency arbitration is not mentioned anywhere in the A&C Act. The court had to establish that
an emergency arbitrator

Section 2(1)(d) - (d) “arbitral tribunal” means a sole arbitrator or a panel of arbitrators;

It does not include an emergency arbitrator. There is a presumption that this section refers to the
constitution of the tribunal. It implies that it is a regular appointment of an arbitrator r/w Section
16 and 17. And hence does not cover emergency arbitrator.

Section 2(1)(d) r/w Section 2(1) - 2. Definitions.—(1) In this Part, unless the context otherwise
requires,—

(a) “arbitration” means any arbitration whether or not administered by permanent arbitral
institution;

This establishes that even if there is no permanent or regular tribunal, parties can appoint an
arbitrator.

Section 2(6) r/w 2(8) r/w Section 17(1) and Section 21 - (6) Where this Part, except section 28,
leaves the parties free to determine a certain issue, that freedom shall include the right of the
parties to authorise any person including an institution, to determine that issue.

(8) Where this Part—

(a) refers to the fact that the parties have agreed or that they may agree, or

(b) in any other way refers to an agreement of the parties,

that agreement shall include any arbitration rules referred to in that agreement.

“During the arbitration proceedings”

…

These sections read together, parties can appoint an emergency arbitrator. And an award passed
by such an arbitrator will be recognized under Section 17(1), where seat is India.

Award passed by the emergency arbitrator will be binding as per the agreement for the parties.
Section 17(2), an order passed by an emergency arbitrator cannot be appealed. If such an award is
not enforced by the parties, it will amount to contempt of court. The permanent tribunal will
enforce the award, i.e., parties can’t go to a court but only to the permanent tribunal.

Case X – PASL Wind Solution v. GE Power (2021)

(https://www.natlawreview.com/article/india-party-autonomy-trumps-sc-allows-two-indian-
parties-to-choose-foreign-seat)

Issue: Whether 2 Indian parties can choose foreign seat for an arbitration?

Arbitration friendly decision was passed here.

4 Points in debate:

i. Two Indian parties are entitled to “elect”, and not “select”, a seat of arbitration outside
India. Elect means that the parties are superior than the selection, which is unanimous
such as when selecting venue. Elect implies that the parties have written something in
the agreement deciding the law. Elect is about who wins, select is unanimous.

Constitutionality was challenged, since choosing law decides the jurisdiction of the court.

(Prior to this 2 HCs – Delhi HC accepted it and Bom HC rejected it - had given contradicting
judgement, word was “select”. Clarification given by the SC, and accepted it.)

ii. ICA used in part I is party centric and ICA in part II is place centric, to prove that Indian
parties can choose a foreign law
iii. As a result a foreign seated arbitration between two Indian parties would qualify as an
ICA under Part II. Even if you are an Indian party, Part II does not concern with where
the parties belong to, and the definition is place centric.
iv. Two Indian parties are entitled to interim reliefs before Indian Courts. In this case a
party had approached the court for interim relief under Section 9. Since the parties are
 Indian, and as long as nothing to the contrary is written in the agreement, the parties
can approach the court.

(Slides)

Gujarat HC, during enforcement proceedings, also agreed that two Indian parties can go for an
ICA.

Section 20 is the place of arbitration. In domestic arbitration, place is juridical. For ICA, seat of
arbitration is juridical.

For execution, Part II is concerned. For Section 9, read Section 2(1)(f). Reading 2(1)(f) bridges
the gap between the party centric and place centric provisions.

Section 23(1): Exempts an agreement from being in restraint of legal proceedings.

Section 28 – Public Policy issue: If any such decision is passed in an award, whether it amounts to
a contradiction of public policy.

Public Policy under Contract Act has a much broader scope than that defined under the A&C Act.
It is not required to see Public Policy under the contract act, since it’s an arbitration proceeding
and hence only public policy as defined under A&C Act is relevant. Two private parties dealing
with a dispute (in this case, deciding to use a neutral place (not venue)) does not impact the public
at large or cause any public harm. They should be allowed to choose it.

At the time of execution, public policy will be tested under A&C act, and no need to restrict at the
start itself.

Section 28(1) would be applicable only in cases where two Indian parties have chosen domestic
arbitration, which is not the case here.

Provisions through which the court decided that two Indian parties can choose a foreign seat -
Section 47 (application filed), section 49, definition clause, Section 28 (rules applicable to dispute),
2(b) and 2(f).

Case XI – Pravin v. Galaxy Infra

(https://www.nishithdesai.com/SectionCategory/33/Dispute-Resolution-
Hotline/12/57/DisputeResolutionHotline/4689/2.html)
Section 37

Section 11 – Appointment of an Arbitrator by the court

(This case was filed during the time Section 6(a) and Section 11(7) were there, but have been
repealed by the 2019 amendment.)

Section 8 is at the stage of judicial authority. It will become “court” when it looks into the merit,
and until then, it is administrative in nature. The order passed by a judicial authority under Section
8 is to be considered as an administrative order.

Difference in Judicial Authority in Section 8 compared to Section 11.

If the party is not satisfied with the appointment made under Section 11, the party cannot file an
appeal under Section 37.

To maintain the harmony between Sections 8 and 11 in terms of powers vested, a similar practice
or procedure (seeking amendments) should be there. The court also stated that Section 11(7) and
Section 37 must be looked into.

Neither in Section 8 or 11, the court is not meant to look into the validity of the agreement. Prima
facie, just see that the intention of the parties is there for an arbitration, and subsequently refer
them to arbitration.

(Discussion: Some issues should be raised as preliminary issue, while some should not be. For
example, qualification of an arbitrator is a jurisdictional issue, whereas subject matter jurisdiction
can be raised during the merits stage.)

Duty of the court under Section 8 and 11 is administrative in nature, and hence validity of the
arbitration agreement should be decided by the tribunal only. The court will only look into the
intention, and not into the existence of the agreement.
Missed – 03.09.2022

5th September 2022

Case XIV - The Government of Haryana PWD Haryana v. M/a G.F. Toll Road Pvt. Ltd. (SC
- 2019)

Former employee can be appointed as an arbitrator

(https://www.nishithdesai.com/SectionCategory/33/Dispute-Resolution-
Hotline/12/57/DisputeResolutionHotline/4505/6.html)

Issues:
 1. A&C Act does not disqualify (Schedule No. 5 and 7) a former employ if he has been
appointed and can act as an arbitrator. The reason that this is opposed is that it can raise
justifiable doubts.
2. Even if 2015 Amendment Act does not prevent a former employ being appointed as an
arbitrator, how far is it justifiable to appoint an arbitrator, especially in cases where State
is a party.
3. Mandate of an arbitrator if terminated for any reason, the substituted arbitrator should be
appointed based on the arbitration agreement only, and not otherwise (i.e., not by the curial
law or the institution chosen by the parties).

Concept: Appointment of arbitrator is autonomy of the parties. If they have not given anything in
the agreement, and they have decided that the institution will appoint, in that case parties cannot
appoint and only the institution has the power to appoint an arbitrator. If the parties stated that they
will appoint an arbitrator each and the third arbitrator will be appointed by the other arbitrators,
and they fail, then model law comes in (Section 11) and the court will appoint. If the parties decide
that the arbitrator will be appointed as per the Model law. Model law supersedes the curial law,
even if the institution rules do provide for appointment. This is because the agreement is drafted
as per the model law. This happens when there is no clarification in the agreement in the event that
the two arbitrators or the parties fail to appoint, model law will come in. Parties will have to
explicitly give the institution the power to appoint, otherwise model law will come in.

Facts: (Slides)

ICA appointed the substitute arbitrator and the presiding arbitrator, and if an award was rendered,
then the award is liable to be set aside under Section 32, since the appointment of the substitute
arbitrator was not according to the agreement. ICA was only entitled to appoint one arbitrator, but
it appointed two. The subsequent arbitrator could not have been by the ICA. The parties went to
the district court under Section 9.

(There are many ways in which parties could approach the court. Here, parties went to HC under
Civil Revision because it has wider powers under that. In CPC, they will give direction to the
tribunal, whereas under A&C Act under Section 37, court will decide the matter in terms of
arbitration act.
Sections under which parties can approach the court - 8, 9, 34, 36, 37. If no specific reason to go
to court, go under Section 9. Other sections are very rigid. You can go to do timepass under Section
9.)

HC held (need to confirm) - The issue of substitution will only come when the mandate has
terminated. Here, mandate was not terminated. (Section 15 is failure of act. Here, the arbitrator did
not fail.) The parties took away the mandate of the arbitrator. Question of substitution per se
shouldn’t have come here. This is why the institution stepped in, and appointed the arbitrator as
per its rules.

Case XV – Union of India v. Hardy (SC unreported 2018 – happy case)

(https://www.nyayshastram.com/post/seat-venue-place-of-arbitration-a-detailed-analysis)

Seat v. Venue debate settled by Supreme Court

[Discussion: “Place” under Section 20 (Clauses 1 & 2) becomes juridical in two circumstances,
when parties have chosen that law of India will be followed. Other would be where in an ICA,
Indian law has been decided as the applicable law.

“Seat” will always be juridical.

“Venue” cannot, under any circumstances, becomes juridical in nature. Venue deals with
the cost-effective nature of the proceedings, and venue can keep on changing during the
proceedings.

This distinction has many implications in practice. E.g., two parties have written that “seat” would
be X country. They decide that the law of the contract would be of X country. Here, “seat” is X
country. Arbitration proceedings started in X country. The directors and participants of the
arbitration later decide that for purposes of convenience, the remaining proceedings should be
performed in the Y country. Award is passed in Y country. Under Section 33, place has to be
mentioned in the award. The issue here is – should an application be filed stating that the award is
liable to be set aside since the place of arbitration, i.e., Y country, is not the one decided by the
agreement of the parties.

Since venue as Y country was not written, and in the absence of anything specific written in the
agreement. Which country’s court would have jurisdiction? X court will be approached under
Section 34.
Original award is attached in an application, and the award would mention Country Y. Would the
court be allowed to read your agreement to check applicable law? No, since that would amount to
interference. Hence, the court will not be able to decide which is a place or venue of the arbitration. Commented [SP10]: Remember Intervention is allowed

Court will have to pass an order only based on the award, mentioning the place of the award. Not interference

To avoid such circumstances, the court stated that we are required to read the arbitration clause at
this time, and only then an order under Section 34 can be passed. Section 31 is also relevant.]

If clause says that seat is X country, the law governing the contract and the arbitration agreement,
would be of country X. This is based on the close connection test.

Case XVI – Rajasthan Small Industries Corporation Limited v. M/s Ganesh Containers
Movers Syndicate

(https://www.nishithdesai.com/SectionCategory/33/Dispute-Resolution-
Hotline/12/57/DisputeResolutionHotline/4514/4.html)

Article 142 of the Constitution of India

(08.09.2022 – Khushi)
9th September 2022

2015 Ordinance, then amendment. When arbitration proceedings were initiated, there was neither
the act nor the ordinance. Amendment was prospective, and all provisions to be read with this
amendment. Amendment stated that it will apply to alls arbitration proceedings. Issue was:

What will happen to proceedings already before either a court, or the tribunal, i.e., will the
amendment be applicable?

A clarification was provided that unless the parties explicitly consent to the application of the
amendment to the ongoing proceedings, it will not be applicable to pending applications.
To avoid any conflict, the court here gave clarity. Amendment provided that former employee
can’t be arbitrator, but in this case, it was an employee. The court said that since both parties did
not consent to the applicability of the amendment, it would not be applicable.

How can the SC give direction under Article 142 Constitution of India? The SC can do that, due
to the text of the article any law in the territory of India. However, the court will not look into the
merits, and only in a procedural manner.

There was a procedural failure by the arbitrator, which was one of the grounds on which the award
was set aside. In order to do “complete justice”, the SC set the order aside, due to violation of
equity. SC ordered that new proceedings should be started.

XVII – Rashid Raza v. Sadaf Akhtar

(https://www.nishithdesai.com/SectionCategory/33/Dispute-Resolution-
Hotline/12/57/DisputeResolutionHotline/4547/4.html)

34(2)(b) explanation 1 & 2

Can fraud be arbitrated?

Because the fraud is done, it creates criminal repercussions which is not arbitrable.

Based on fraud and corruption, if the contract is entered into, and the contract is breached, is it still
arbitrable? Yes, because subject matter of the dispute does not create criminal repercussions.
Separate criminal proceedings may be undertaken, but it will not debar the arbitrator from
arbitrating the issues in the dispute, i.e., breach of the contract. The arbitrator will not have
jurisdiction to decide the matter of fraud and corruption.

This decision was based on the 2016 landmark judgment, i.e., A. Ayyasamy vs. A. Paramasivam.

Main issue: Whether the subject matter/arbitrability is the jurisdiction to decide by the tribunal or
court of law?

Any issue which creates a criminal repurcussions and influences the public domain, it is not
arbitrable. This decision will have to be taken by the tribunal. The arbitrability basics was defined
in the case of Afcons.
In this case, the court bifurcated the criminal and public domain context. If there is serious
allegation made, then it is not arbitrable. If it is simple, then it is arbitrable.

Mere allegations of fraud and corruption, these allegations refer the jurisdiction to the court instead
of reference to a tribunal. Allegations need to be established by way of evidence. If it requires
evidence, collecting it is the job of the court and not the arbitrator. Referring the matter under
Section 8 to arbitrator, and then he denies jurisdiction, this takes time.

(missed)

The court is not able to read the international principles where arbitration clause has to be read
separately.

SC observed that since it is complicated in nature, then it should go to the litigating court. But
making allegations per se, how far it is justifiable, the court relies without having evidence. Court
orders collection of evidence, and the court does not appoint arbitrator. However, these separate
proceedings does not debar the arbitrator from parallelly running its arbitration and exercise its
jurisdiition.

If the fraud and corruption influence the contract, and if it leads to the contract being void ab initio,
it will be left to the tribunal if it is simple.

HC would usually appoint the arbitrator, and then the tribunal will decide if they can arbitrate or
not.

This case is still in debate.

Fraud is not an arbitrability issue, it is a jurisdictional issue. Arbitrability comes out of jurisdiction.
(Court may have jurisdiction, but subject matter may not be arbitrable) (Court superseded).

In this case, it was about the validity of the clause – which was agreed upon by both parties. The
court only had to appoint arbitrator under Section 11.

(Rest from the article)

If there are criminal repercussions, then go to the separate court. But that does not debar the arbitral
tribunal from exercising its jurisdiction. Two parallel proceedings will take place.
XVIII – BGS SGS Soma JV v. NHPC Ltd. (2019)

Does the selection of a “Seat” determine a Court’s supervisory jurisdiction?

Yes, seat decides the supervisory role. Reason is that definition of court is territorial. It only has
jurisdiction in exclusion of all others is due to Section 42.

(https://www.nishithdesai.com/Content/document/pdf/Articles/200515_A_India_SC_clarifies_ro
le_of_a_seat_in_arbitration.pdf)

This case declared that Hardy case is a bad law. Counsels relied on the Hardy case, Antrix Devas
case (overruled in this case), and lastly the balcos case (accepted the ratio decided to balco). All
these cases were related to seat and venue.

If parties choose Gandhinagar as seat explicitly, Gandhinagar district court will have supervisory
jurisdiction. However, if parties do not mention seat, and only venue is mentioned, then that venue
becomes the seat. The venue where arbitration is conducted, that court will have supervisory
jurisdiction. Part I of the Act does not use Seat nor Venue, but only Place under Section 20. Place
where arbitration is conducted, that court should only have jurisdiction. This must be read with
Section 42 (Jurisdiction). This is in domestic arbitration.

Arbitration proceedings shall be conducted in New Delhi/Faridabad. In a dispute, parties mutually

agreed that arbitration proceedings be conducted in New Delhi. Few sittings were conducted in
Faridabad, but the award was rendered in New Delhi. When the place under the Award is New
Delhi, it fits with Section 20, and then Delhi district court will have jurisdiction and supervisory
role.

However, in the same case, cause of action arose in Faridabad. But venue was New Delhi. Award
passed in New Delhi, place under Section 20 is New Delhi. Agrreieved with the award, under
Section 34, the aggrieved party approached Faridabad court. Jurisidction of Faridabad, passing an
order under Section 34, I do not have jurisdiction since your venue is in in New Delhi, and award
was passed in New Delhi, place is New Delhi. Hence, go to New Delhi court. This order only
decided jurisdiction, but not grounds under 34. Appeal is filed under 37(c).

HC also held that you go to New Delhi. Counsel assumed that the order implies set aside
proceedings failed. Execution proceedings filed. Aggrieved party goes to SC.
 • In this case, whether appeal to 34 is maintainable?
• (missed)
• Since parties haven’t mentioned Seat in arb agreement, whether the venue can be
considered as a seat, and r/w Section 42, should only Delhi have jurisdiction?

Applying under Section 34 by not mentioning any limited grounds under 34, whether the HC can
accept petition in appeal under Section 37. In both 34 or 37, it is not mentioned that jurisdiction
must be established, since role is very limited.

When the award is in your hand, and you go for challenging it, you have to go under 34 only, even
if only for jurisdiction. Order is passed under 34 only, even if no justification is given under the
grounds mentioned under 34. Can this be called an order under 34?

Case XVIII Ashwani Minds v. U-Shin Ltd. 2020 Del 1266 OMP (I) (COMM) 90/2020

(https://www.nishithdesai.com/fileadmin/user_upload/pdfs/NDA%20In%20The%20Media/News
%20Articles/200626_A_India_parties_cannot_apply_to_courts_after_emergency_arbitration.pdf
)

Non-applicability of Part 1 in the situation where ICA seated outside India, except the parties in
their agreement written that application of Part 1 provisions. ICA seated outside India, applicability
of Part 1 not mentioned, there is presumption that the parties have excluded Part 1 of the A&C
Act.

Emergency Arbitration proceedings under curial law are similar to Section 9 (Interim measures by
court), which is similar to Section 17 (Interim measures by tribunal). However, emergency
arbitrators are independent in nature. This is because an emergency arbitrator is not appointed by
the agreement, but by the curial law and institution.

(Decisions are administrative in nature, judgements are judicial in nature. Decisions are regarding
procedure, whereas adjudication is for judgments.)

Emergency arbitrator is not deciding on the merits.

Here, Delhi HC said that I am rejecting application. I am not sitting as an appeal.

Sir’s discussion:
Issue with the order: Arbitration doesn’t talk about appeal. Second, amergency arbitrator has not
decided anything on merits, so how would appeal arise?

I can’t make any order under Section 9, since I am prevented by Section 2. Under Section 2, Part
1 shall apply where place of arbitration is India. In this case, place was Japan, hence it won’t apply.
However, the reason given is that unless the parties do not include it in the agreement, it is assumed
that Part 1 will not apply to an ICA seated outside India. Only if the parties expressely or impliedly
agree to apply Part 1 to the agreement will it apply.

Simply writing seat is Japan, it does not lead to presumption that Part 1 does not apply, especially
at the time when emergency arbitrators apply it under curial law.

Emergency arbitrator is appointed under curial law. Curial law as a separate from seat, it does not
imply that the intention is to exclude part 1.

Emergency arbitrator is not according to law governing the contract, or law governing the
arbitration agreement. It is under curial law. Hence, it cannot be said that the parties wanted to
exclude Part 1. Section 2(2) says that when seat is outside India, if nothing is written contrary to,
intention shows that Part 1 is excluded. However, since the decision is independent, and the
judgment of court was based on law of seat to exclude India, even though the award was passed
under curial law.

3 laws governing the arbitration – contract, arbitration agreement and curial law (institutional
rules).

Seat decides two laws – governing contract law and arbitration agreement.

If curial law allows you to go to your own court for interim relief, which does not affect the merits
of the case, how the Indian court restricted the Indian party from getting relief?

Exclusion of applicability of Part 1 is only possible when you write in your agreement that we do
not want to approach an Indian court. It cannot be based on the presumption that if it is not
mentioned, they cannot apply.

This is the contemporary debate. It can have grave implications practically.

Case XIX – Government of India (“GOI”) v. Vedanta Limited (2020)

Limitation period for enforcement of foreign awards in India

(https://www.natlawreview.com/article/limitation-period-enforcement-foreign-awards-india)

4 issues

From the date the cause of action arises, within 3 years you can initiate arbitration proceedings. 3-
year limitation period as per the limitation act, 1963.

If there is a mandatory clause to negotiate before arbitration, that is deducted from the limitation
period. If there is no such clause, then no period will be deducted.

Once the date of cause of action arises, the start of proceedings or any other provision of the A&C
Act, this date would amount to the initiation of the limitation period. This date does not depend on
the autonomy of the parties. Date of notice will not be taken into consideration, but only the date
on which the dispute arose matters. Limitation period is a statutory provision.

There is also a limitation for execution of award or setting aside the award. These are mandatory
clauses.

Important cases relied upon in this case is Fuerst Day Lawson Ltd. v Jindal Exports Ltd. [2009]
and LMJ International Ltd. v. Sleepwell Industries [2019 5 SCC 32].

Final and binding is not necessarily required in a foreign arbitration. Further, foreign executing
court having authority set aside an award,

Set aside and execution of foreign award proceedings can take place simultaneously while the
finality of the award is being argued in the seat’s courts. Even though the application was pending
in Kuala Lampur, simultaneous proceedings to enforce was ongoing in India in this case.

Under 47, it is administrative action. The court here clarified with two words – Part C

Read Section 44 of the definitions clause to recognize the award, subject to conditions under
Section 48.

Case XX – NHAI v. M Hakim and Anrs. (2021 SCCOnline SC 473)

Courts can set aside or uphold an arbitral award – not modify

(https://www.nishithdesai.com/SectionCategory/33/Research%20and%20Articles/12/57/57/4768
/15.html)
Authority here is a collector – if both decide compensation, and if not satisfied, the arbitrator and
collector. Not generally called as a pure arbitration order. If not satisfied, can appeal as per the
clause. Against the decision of the collector, parties can go to district court.

Party went to the district court under Section 34.

Arbitration clause is not as per Section 7 of the Act, the arbitration clause is one sided, there is no
voluntariness or process, even arbitrator appointment was appointed by the government. The
question – if such type of a clause is there, is it valid?

Its an arbitrator along with authority decide – it cannot be modified by district court. Here,
landowner may become remediless. DC increased compensation, HC denied it stating that
arbitrator has decided. SC said based on clause in the government form, the government was
correct.

(Sir – It is a forced acquirement of land by NHAI, and giving less compensation. The clause further
stated that what procedure would be adopted by two people, and did not follow guideline that
market values will be awarded. Process was completely biased. Even if there is a statutory
arbitration like in this case, there is no consent per se thereby it does not comply with the basic
principles of arbitration.)

[Discussion – Under 34, if there is any mishappening, the case will be sent back to tribunal, correct
errors, and come back. This is remand, although not as per CPC. Under 34, there is no review of
merits, whereas in CPC is there. On merit, only tribunal can look into.]

Case XXI – Indian Oil Corporation Ltd Through its Senior Manager v. M/s Shree Ganesh
Petroleum Rajgurunar Through its Proprietor Mr. Laxman Dagdu Thite

Acceptable error and unacceptable error in an arbitration award

What is acceptable error and unacceptable error in an arbitral award? Supreme Court clarifies the
scope of judicial intervention

(https://www.nishithdesai.com/SectionCategory/33/Dispute-Resolution-
Hotline/12/57/DisputeResolutionHotline/5321/19.html)
INVESTMENT ARBITRATION (AKA INVESTOR STATE DISPUTE SETTLEMENT)

International Commercial Arbitration – Two private parties signed and registered a contract, paid
stamp duty, inserted arbitration clause in contract. Any dispute between such parties, they prefer
to go for arbitration. Arbitrator clarifies which law, and parties exercise their autonomy to decide
law and nature of dispute.

Investment Arbitration – It is not for a specific contract. It involves the State, thereby involving
State’s assets. States want to get foreign investment, which leads to development, hence countries
enter into Bilateral Investment Treaties to invite investors. The agreement here between States is Commented [SP11]: A bilateral investment treaty (BIT) is
an agreement between two countries regarding promotion and
usually a BIT. protection of investments made by investors from respective
countries in each other's territory
E.g., we have industry/sector specific agreements with Japan. Here, disputes are to be resolved
through arbitration. They exclude the jurisdiction of each other’s domestic courts. They mostly Commented [SP12]: Reason: This allows the foreign
investor to bypass national jurisdictions that might be
follow UNCITRAL Law. perceived to be biased or to lack independence, and to
resolve the dispute in accordance to different
In BITs, it involves 2 sovereign states. These BITs cannot negatively affect the people at large, protections afforded under international treaties.

and cannot circumvent rights of the citizens. Development that is encouraged through BITs should
be sustainable development. Rights are essential, and they take precedence over any form of
development or economy.

A dispute under IA is between a foreign investor and a host state. BIT is between sovereign Host
States and Home States. Corollary to this, the FIs are a third party to the BIT.

Bilateral Investment Treaty Between Two Sovereign States

[Foreign Investor is third party]
Investment Arbitration Foreign Investor and Host State
Law applicable on the dispute, autonomy of the parties, jurisdiction of the tribunal, and the law
applicable attracts IL basic principles, and is very different from ICA. It is a different branch of
IL.

Consent is very important in this topic

Note: Consent of host state is necessary for a foreign investor to initiate a dispute. Consent for
investment arbitration is given by the host state through International Investment Agreements
(IIAs). These include BIT, MIT, Free Trade Agreement, etc.
CONCEPT OF HOST STATE AND HOME STATE.

FI invests in India, and is of a different nationality. The nationality of the FI is the home state.
There is no role of domestic investor or protection for a domestic investor. A FI has to be involved
to invoke jurisdiction of an IA tribunal.

Dual nationality sometimes brings into issue the question of jurisdiction, especially if the dual
nationality is of the home and host state both.

[Read – Chapter 1 - Treaty interpretation in public international law by Maximilian Clasmeier

(Kluwer Arbitration);

https://www.international-arbitration-attorney.com/investment-arbitration/]

Stats (mention in exam): As of June 30, 2020 – ICSID had registered 768 cases under ICSID
Convention and Additional Facility Rules.

Interpretation of domestic law of contract and arbitration agreement, is to be interpreted by the

Vienna Convention on Laws of Treaties (VCLT 1969) since an FI is involved. The relationship is
based on the BIT to establish a tribunal.

Legal Instruments –

1. BIT
2. Underlying Contract
3. VCLT, and ICJ Statute

Procedural aspects –

Two essentials –

1. Local remedies must be exhausted.

2. If it’s a multiple layered clause, then all requirements to reach the arbitral tribunal must be
fulfilled. Usually, a cooling off period is provided in BITs, for example to engage in
Negotiation before filing an IA.

Real jurisdiction –

1. Tribunal will see the nationality of the investor (Ratio Personae)

2. Subject matter jurisdiction (Ratio Materiae)
MFN Clause, Legitimate Expectations is to be tested by the IA Tribunal. Sir is focusing on ICSID.

Umbrella Clause, FPS

Article 25 ICSID; Articles 3, 4, 21 VCLT, ICJ Statute Sources of Law and CIL

BIT is read, thereby applying VCLT. It would bring in MST and Customary International Law.

Arbitration clause in a BIT effectively excludes the jurisdiction of domestic courts. Domestic
courts pass orders in the capacity of a private tribunal of the host state, and hence once that is
exhausted and the FI is not satisfied, then the party can go for IA. Either Apex Court of the host
state passes an order, or the petition is pending before the domestic courts beyond reasonable time,
this would imply that the local remedies have been exhausted.

Even if there is no arbitration clause in a specific contract, but there is a BIT applicable to the
parties, in that case it is assumed that the BIT arbitration clause becomes binding for an FI. Hence,
it cannot be argued that since there is no arbitration clause in a contract, there cannot be an
arbitration. FIs bypass the domestic jurisdiction.

If there is an applicable BIT, the State or FI will be forced to invoke it.

Fork in the road clause - “Fork in the road” clauses, included in some investment treaties,
“provide that the investor must choose between the litigation of its claims in the host State’s
domestic courts or through international arbitration and that the choice, once made, is final”. It
is also expressed by the Latin maxim of una via electa non datur recursus ad alteram (“once one
road is chosen, there is no recourse to the other”). Hence, the fork in the road clauses result in that
the investor has a choice of forum that is irrevocable.

Scheme of Article 31 of VCLT

Most important provision in interpretation of treaty is Article 31 of VCLT.

Article 31 (1) has two principles – Ordinary meaning AND Object and purpose.

Ordinary meaning is when you determine the words’ meaning objectively (can see textualist
approach in Article 31.1)
Further, recourse to object and purpose of the treaty is also possible (note: object and purpose
to be looked at only when ordinary meaning is not possible to get)

PROVISION DESCRIPTION
Article 31 (1) Ordinary meaning rule
Article 31(2)
Article 31(3) provide that any subsequent agreement
regarding the interpretation or practice in the
application of the treaty shall be taken into
account
Article 31(4) Special meaning rule

Three Schools of Thoughts of interpretation (Taken from treaty interpretation in int. law)

1. School of intent – To interpret the dispute. Intention of the signatories. Signatories in IA

are the two sovereign states. Intention is of two types -
a. Promote investments
b. Protect the investors

Intention is important since the application of the intention needs to be considered carefully
as it may lead to an investor bias. This school considers intention of the signatories to be
the starting point of any interpretation.

2. Textualism – Intention of parties are relevant but text is only looked at. Wording of the
treaty is source and the limit of interpretation. In BITs, but there is no arbitration clause in
the contract with FI. The arbitration clause can be borrowed from the BIT, which solves
the intention in the absence of express provision for arbitration. The underlying contract
should not be incompatible with any of the provisions of the BIT. If the issues of the
underlying contract are common with the issues of the BIT (for e.g., FET, FPS), then these
issues will be observed under the BIT. Contractual conditions are being uplifted at the level
of the BIT. Through an umbrella clause, the provisions of the contract, you are reading
with the BIT. Even in the absence of an Umbrella clause, the guiding principles of the BIT
will still be applicable.
3. Teleology – This school focuses on the object & purpose of the underlying contract.
Tribunal reads the conflicts and interests of the investor and investment; they will read the
 objects and purpose of the underlying contract as well as the BIT. It will then determine
the legitimacy of the expectation of the investor.

These three schools of thoughts are heavily supported by the VCLT. Do we consider it as CIL or
GPL? How is it recognized as CIL?

Ans. VCLT is the only instrument by which any provision of the BIT or MIT can be interpreted.
Host state’s law is to apply, but it is to be applied in line with CIL, which is VCLT. It has now Commented [SP13]: VCLT has attained the status of CIL

become a long duration practice, and it is now the only way (mandatory) to interpret the treaties
(Article 31 VCLT). Good faith is essential.

Precedence in PIL

ICJ Statute Article 59, and 38.1(d) or 31(d) - Confirm

International courts, conditions precedence is not binding.

In domestic law, inferior courts follow the law of superior courts since it is applicable to all people
in that territory. However, in PIL, parties are from different jurisdictions and cultures, precedents
cannot be followed. Hence, the tribunal is required to follow other sources.

In IA, main issue or conflict is the intention of the parties, and not intention of the signatories.
Conditions of the contract will be in dispute. Second school of thought becomes relevant here.

The contract is to be read along with the BIT, and third school of thought becomes relevant.

Article 32 VCLT – Supplementary means of interpretation

From the start of the discussion, till the conclusion summary of the BIT negotiation, is also taken
into account.

FET – State should not be hostile, not act arbitrarily or unreasonably. No unnecessary harassment
of an investor. Legitimate expectations are to be protected.

MFN – From slides

FPS – From slides

Umbrella Clause – From slides

Expropriation – Non-granting of license by host state is important on the ground of domestic public
policy. It can still amount to expropriation.
Jurisdiction and Admissibility

In ICA, competence and admissibility is same. However, in IA, it is not the same.’

Jurisdiction of the Centre is administrative; competency is of the Tribunal. Hence, the powers of
the Tribunal is to review the order of jurisdiction by the Centre, and it is administrative in nature.
Review can be at the initial stage when competency of Tribunal is being decided, or while deciding
jurisdiction. Nationality in jurisdiction of the parties is administrative.

Some states allow for dual citizenship. Nationality of the host state and at the same time, nationality
of the third state, who has not signed the ICSID convention but consented to its jurisdiction.
Nationality – when will it be considered?

When the dispute arose, or when the BIT was signed, or at some other stage. And who decides –
Registrar under Article 25, or the Tribunal?

Apart from parties giving consent to ICSID centre, there are two other ways –

If both are signatories, it goes to ICSID Rules; or

If one of the parties is not signatories with ICSID rules, then ICSID AF Rules may apply.

More powers to the parties are given under ICSID AF Rules, i.e., parties to the contract (investor
and State), and not the BIT signatories.

Nationality issue is investor’s nationality, and arises only when we read the underlying contract.

Once consent is given to ICSID, you cannot withdraw unilaterally.

Article 25 – Consent of the parties

Jurisdiction clauses in ICSID Convention –

Article 25, Article 26 (Which attracts other provisions such as Article 36 & 41)

Nationality will be checked in the first instance, based on the definition of investor.

Under 36(3), SG will check whether both States are parties to ICSID convention. If one is not,
then whether AF rules will apply? Apart from consent of the parties, ICSID also mandates the
consent of the non-party State as well. This is because International Law will determine the dispute
between the private parties. The award will be in favour of, or against, a sovereign state. The State
is the actor.
Under Article 41, the Tribunal judges its own competence. If there is any objection by a party to
its jurisdiction, or there is no competence, then it will be determined by the Tribunal whether to
check it now, or during the merits stage. This Article describes the process.

(Read slides for all relevant provisions)

How many provisions are relevant to decide the jurisdiction and competence of the Tribunal?

They are Articles 25 and 26 of the ICSID Convention r/w Rules 41 and 42(4) of the Rules.

An author wrote that there are many translations of the convention, and there is a tussle between
English and French versions. Read the quote in slide.

It essentially states that a few versions indicate that the Centre’s order as to jurisdiction cannot be
reviewed. If the word interchangeably is used, it implies that there is no difference between the
words jurisdiction and competence. If the registrar is empowered to do this, then why not send it
to the tribunal directly.

Whether the centre would read the nationalities or not. No, since this would require the Centre to
read the definition of investor and investment, this would essentially be overreaching into the
competence of the Tribunal, and hence cannot be done by the centre. The registrar looks at the
general jurisdiction, not based on the merits of the case.

Centre has to read only the convention, and function will be based on the Centre rules, nothing
else.

(The arguments of the author are in the slides.)

Article 25 is the job of the centre. 41 is the job of the Tribunal, but while reading 41, 25 is
necessary. August Reinisch slides.

Jurisidiction will be decided by the Centre, and admissibility will be decided by the Tribunal.

Admissibility and Competency are same. Centre has a jurisdiction or competency is not the same
as the Tribunal having jurisdiction or competency.
 4th October 2022

Tokios Tokeles v. Ukraine, Case No. ARB/02/18

Facts: The Claimant, Tokios Tokeles, is a business enterprise established under the laws of
Lithuania [Europe]. It was founded as a cooperative in 1989, and, since 1991, has been registered
as a "closed joint-stock company." The Claimant is engaged primarily in the business of
advertising, publishing and printing in Lithuania and outside its borders.

Its business was in Lithuania and outside it as well. In 1994, it established Taki Spravy (a wholly
owned subsidiary) in Ukraine, making an investment of USD 170,000. Since then, it reinvested
the profits in the subsidiary.

Claimant alleges the Ukraine engaged in a series of actions with respect to Taki Spravy breaching
Ukraine-Lithuania bilateral investment treaty.

Claimant’s Arguments:

Claimant alleged that Ukrainian government

(1) conducted numerous and invasive investigations under the guise of enforcing national
tax laws;

(2) pursued unsubstantiated actions in domestic courts, including actions to invalidate

contracts entered into by Taki spravy;

(3) placed the assets of Taki spravy under administrative arrest;

(4) unreasonably seized financial and other documents; and

(5) falsely accused Taki spravy of engaging in illegal activities.

Respondent Arguments:

➢ Claimant cannot use Ukraine-Lithuania treaty as Tokios Tokeles is predominantly owned

and controlled by Ukrainian nationals.
➢ 2/3rd of the Company is owned and managed by Ukrainians. There is no substantial
business activity in Ukraine. Thus, Claimant is a Ukrainian investor in Lithuania not a
Lithuanian investor in Ukrain.
 ➢ If allowed, it would allow nationals of a country to pursue international arbitration against Commented [SP14]: This would also be inconsistent with
the object and purpose of ICSID convention
their own government and thus, requested the tribunal to pierce the corporate veil.
Commented [SP15]: (1) The jurisdiction of the
➢ Further, ICSID jurisprudence allows for the use “control-test” rather than state of Centre shall extend to any legal dispute arising
directly out of an investment, between a
incorporation test and allows the piercing of the corporate veil on occasions.
Contracting State...and a national of another
Contracting State, which the parties to the dispute
Important Provisions consent in writing to submit to the Centre. When
the parties have given their consent, no party may
• Article 25 of ICSID Convention withdraw its consent unilaterally.

• Article 1 of Ukrain-Lithunia BIT (2) National of another Contracting State means:

(b) any juridical person which had the nationality
• Article 8 of Ukrain-Lithunia BIT
of a Contracting State other than the State party to
the dispute on the date on which the parties
Article 25 does not define nationality of juridical entities, leaving that up to the reasonable consented to submit such dispute to conciliation or
discretion of the Tribunal. In the present case, corporate nationality would be taken into account, arbitration and any juridical person which had the
nationality of the Contracting State party to the
i.e., the corporate seat and not the control test. Art. 25 does not define corporate nationality but dispute on that date and which, because of foreign
control, the parties have agreed should be treated
indicates the outer limits within which a dispute may be brought. This must be interpreted as as a national of another Contracting State for the
widely as possible. purposes of this Convention.

Contracting States have wide discretion to define corporate nationality. It will then depend on the Commented [SP16]: Article 1(1) of the BIT defines
"investment" as "every kind of asset invested by an
BIT definition. VCLT is applicable, r/w good faith on the object and the purpose of the BIT. The investor of one Contracting Party in the territory of
the other Contracting Party in accordance with the
clauses must be interpreted in order to protect investors’ rights. laws and regulations of the latter...." The definition
includes a non-exhaustive list of the forms that an
This would however create biasness. investment may take, such as "(a) movable and
immovable property...(b) shares [and] stocks...(c)
The Tribunal must read the VCLT and complying with CIL. If the Tribunal establishes that CIL is claims to money...." Article 1(1) further provides
that "[a]ny alteration of the form in which assets
respected, it amounts to good faith. The national law of the respective state must be respected as are invested shall not affect their character as
far as nationality is concerned, as per Article 31 r/w with good faith r/w CIL. The Tribunal is not investment provided that such an alteration is
made in accordance with the laws of the
allowed to just read the law of one party, but national laws of both states while respecting the CIL. Contracting Party in the territory of which the
investment has been made."
Article 1(2) of Ukraine-Lithuania BIT: Commented [SP17]:
Article 8 of the Ukraine-Lithuania BIT sets forth the
1(2). “Investor” means: disputes that may be submitted to international
arbitration:
/a/ in respect of the Republic of Lithuania: - natural persons who are nationals of the Republic of (1) Any dispute between an investor of one
Contracting Party and the other Contracting Party
Lithuania according to Lithuanian laws; any entity established in the territory of the Republic of in connection with an investment on the territory of
that other Contracting Party shall be subject to
Lithuania in conformity with its laws and regulations;
negotiations between the parties in dispute.
(2) If any dispute between an investor of one
Contracting Party and the other Contracting Party
can not be thus settled within a period of six ...
Commented [SP18]: Article 31 VCLT AGAINNNNNN
/b/ in respect of Ukraine: natural person who are nationals of the Ukraine according to Ukrainian
laws; - any entity established in the territory of the Ukraine in conformity with its laws and
regulations;

Argument - Since there is no specific provision defining the nationality of the company, the natural
person’s nationality will be taken into consideration. Since they will be shareholders, from
Ukraine, then they won’t be FI and hence ICSID has no jurisdiction. Lithuania also argued
that there is no substantial business activity in Lithuania, and hence not an FI.

Based on the purpose and objective of the BIT, i.e., to protect investments, the Tribunal rejected
this argument.

Maffezini Tribunal gave a different ruling.

Decision: The Tribunal decides by a majority of its members that the present dispute is

within the jurisdiction of the Centre and the competence of the Tribunal

MFN Protection

The 'Most-Favoured Nation' treatment (MFN) clause is one of the principles of BIT, which
attempts to give an investor from one State treatment in another (the host State) that is not inferior
to that of the most favoured neutral third State. An investor covered by a BIT with an MFN clause
can exploit the benefits offered to third-party nationals under another BIT of the host State to bring
them into its relationship with the host State

Through MFN clause, procedural provisions can be imported as well. For e.g., reduced cooling off
period.

Domestic investor may not demand protection of the treaty, but it happens vice versa. Obligations
towards the FI must be given to domestic investors as well. If any measure taken by legislation,
more benefits given to the domestic industry, then it is expropriation. But without legislation, it
will not be considered expropriation.

Criticism on MFN –
Intention of MFN is not only to give benefit to investor, but also to maintain uniformity in fair and
equitable treatment of an investor, irrespective of the jurisdiction of home state or host state. It is
essentially derived from International Law, MST.

This has been criticized by less developed nations. Because of MFN clause, the interpretation goes
in favour of investors, questioning principles of equity and state sovereignty. One should allow a
state to treat differently, the foreign investors. This is not completely unacceptable, since State is
an essential player in the investment regime.

The host state argues that state sovereignty should be respected, and should be allowed to treat
investors differently in its own territory.

Some awards have highly respected state sovereignty. It says “no less favourable treatment”, in
cases of substantive provisions. But applying it to procedural clauses, it has been argued that more
favourable treatment can be provided. ADF v. US – Cooling off period of 8 months can be reduced.

MFN treatment should be on the investment, and not on the procedure. If you want to reduce
period of cooling off through MFN, Minimum Standard Treatment [MST] must be looked into.
ADF stated that we cannot import procedural aspects. We cannot import lesser cooling off period,
nor can we import procedural since MFN applies to treatment of investment. Thirdly, we are
respecting state sovereignty in this regard.

99% of the BITs mention that investment would be covered after consent by the State. For eg, an
investment requires environmental clearances. Here, the host state’s minitry’s approval is required.
In practice, any government entity approves the investment in its territory, the investor initaties
the investment. It takes time to get established in that land. Other approvals may still be required.
Till then, the investment will not be covered under the BIT. If after some time FI does not get the
requisite approval, the investment made will not be covered under the BIT, nor will it be considered
as breach of contract. The Tribunal will not be able to help out. There is a tussle between investor
and host state.

If there is no condition in the basic BIT or contract, MFN clause may be used. However, majority
BITs do not provide this.

MFN clause can be used to import an FET clause, and asl the host state to modify legislation
accordingly.
MFN imports not just the clause, but the treaty including drawbacks. However, this is a disputed
position.

Bayinder v. Pakistan

Here, Pakistan terminated a contract from FI and gave it to domestic investors. No legislation was
changed, but only a termination of contract.

4 cases –

ADF v. USA

In two cases, FET was to be expanded by way of MFN.

In ADF, (Add facts)

Since fabrication work was done in Canada, it affected the price. The key issue here was on
performance requirements. There was also an issue whether the US requirement was a breach of
FET. Investor said that fabrication work was done in Canada, and hence violated the contract.

Argument by USA - Article 1105 NAFTA. MFN Clause 1103 NAFTA. By way of MFN, it would
allow us FET. MFN Clause cannot be used to import FET. US said that the practice was CIL, and
hence cannot be considered to be a breach of contract. International Law restricts the scope of
inclusion of FET clause, and MFN cannot be used to import. (Read on the MFN and FET
Arguments). Investor favorable award.

State’s vested interest if you want to rely on, you rely on CIL. Otherwise, rely on MST. This helps
preserve state sovereignty.

Third Party Funding

The Various Forms of Third-Party Funding in International Arbitration

Litigation Funding Agreements –

There are different types of litigation funders, including companies whose business itself is
funding arbitrations. There are very clear disclosure, which is not limited to the case, but also the
history of the claimant itself. How many cases, win/loss, business, etc. There are various vested
interests of the Third-party in funding arbitrations, which may also include an interest in the subject
matter of the dispute, they want to acquire profit, future business relationship with the claimant,
and lastly, they may have a good relationship with the host state (and they may then negotiate the
matter, within the arbitration).

Sometimes entire awards go to the third-party funder. The benefit to the claimant in this case would
be business relationship developed with that third party funder, and the capital requirements may
be the award itself, thereby helping both parties.

The funders would not give any guarantee in the post award stage – at the stage of execution. This
is not covered under international law, and related to domestic law. Hence, third party funders are
not concerned with this stage.

Litigastion funders are like “snowflakes” – They will take into account various factors to decide
how to fund and how much to fund, which differs from a case to case basis. Litigation funding
agreements are not standardized. Many regulations of the host state are also taken into
consideration while determining the value of the funding.

Case assessment -

Likely to make changes by the host state in its laws, the amendments that the government may
come up with in the near future, the litigation funders do take that into account as well. It should
be supported by the claimant’s counsel. They will also take into account the inflation based on the
estimated time of the award.

Assessment process:

There may be instances where funding is needed after the commencement of the proceedings, or
are nearing the competition. It may also be needed even before commencement of the proceedings.

A Multi-step process

3 steps.

The investment committee is constituted by the third party funders, and are from different parties.
One may be someone very well acquainted with the host state’ laws, second would be someone
from a neutral party who may have some interest in the case, and third are financial experts.
 Umbrella Clause [Aniket]

• Clause provides that host state shall observe obligations they have entered into with regards to
the investments
• There are some who state that these clauses help elevate contractual disputes to treaty disputes
• Often found in BITs and MITs
• Two important cases
o SGS (Switzerland) vs. Pakistan
o SGS (Switzerland) vs. Philippines
o Why important: controversy erupted about the proper reach and meaning of umbrella
clauses and two conflicting interpretations given by the above two cases
SGS vs. Pakistan
• First case where ICSID ruled on the effect of umbrella clause
• The Tribunal refused SGS’s contention that the umbrella clause could convert breaches of
Pakistan’s contracts to violations of the BIT. The tribunal noted that there was no evidence that
this was the shared intention of both Switzerland and Pakistan
• Facts in brief
o Pakistan and SGS got into an (pre-shipment inspection) agreement in 1994
o In 1996, Pakistan notified SGS that agreement will be terminated in 1997
o In 1998, SGS went to swiss courts w.r.t. termination and non-payment of its invoices.
o In 2000, Pakistan commenced arbitration in Pakistan
o In 2001, SGS filed a request to arbitration to ICSID against Pakistan for violation of
BIT and PSI agreement.
o In 2002, SC granted pakistan’s request to proceed with the Pakistan arbitration and
restrained SGS from participating in ICSID arbitration
• BIT Article 11
o Observance of commitments: Either Contracting Party shall constantly guarantee the
observance of the commitments it has entered into with respect to the investments of
the investors of the other Contracting Party Commented [SP19]: Based on this umbrella clause in the
BIT, SGS argued that the umbrella clause had the effect of
• Court elevating violations of the PSI Agreement, which were
contract claims, into treaty claims.
o Rejected SGS argument
 o Article 11 does not contemplate for such consequences
o Under general international law, a violation of a contract entered into by a state with
an investor of another state, is not, by itself, a violation of international law.

SGS vs. Phillipines

• SGS entered into a contract with Philippines

• After unsuccessfully pursuing settlement, SGS commenced ICSID arbitration proceedings,
alleging that the Philippines had violated several articles of the Switzerland–Philippines BIT
by refusing to pay the amounts claimed under the Contract, failing to accord SGS fair and
equitable treatment, unlawfully expropriating SGS’s property, and breaching the so-called
“umbrella clause”