17BBL008

Answer -1

In the following case, the grounds that would be available to the parties for challenging the
arbitrators is that challenge of arbitrators is giving under the section 12, 13 of the Indian
Arbitration and Conciliation act, 1996 and under the article12 and 13 of the Model Law,
1985.

Section 12 of the A&C, 1996 and Article 12 of the model law state that Grounds of challenge
which states that arbitrator when approached for appointment should disclose connection
with the possible appointment which will give justifiable doubts in future and can become the
grounds of challenge and this can only happen when circumstances are of such a nature that
can give rise to justifiable doubts on his/her appointment.

Section 13 of the A&C, 1996 and Article 13 of the Model Law 1985 states the challenge
procedure that is the parties are free to agree on a procedure for challenging an arbitrator and
challenge can be done within the fifteen days of arbitral tribunal being constituted.

So when we apply the section/ article 12 and 13 of the A&C act,1996 and Model Law 1985,
The grounds for the AlphaFly would be that when the skyline appointed the Dr. Verma who
is an professor of science and technology as arbitrator, the issue here would be that the he
doesn’t possess the required qualification as to he had not disclosed that he had delivered the
lecture on the arbitration for start-ups another qualification that can be challenged is that in
terms of practical experience as a legal practitioner because the arbitrator is same as the judge
and should possess the experience in the field to deal with the complex issues that arise
during the arbitration proceedings.

The grounds that are available for the Skyline with respect to AlphaFly appointing the Mr.
Jones is that though he is renowned consultant having specialization in the camera
technology for project management but lacks the practical experience as he is from another
field where he might not have dealt with the arbitration and have legal experience to solve the
crucial issues that arise in arbitration proceedings and also another thing is that it was not
disclosed by Mr. Jones when he was approached to become an arbitrator for the AlphaFly as
to he had 20% stake in the company and this would prove that he would have interest on the
outcome of the arbitral proceedings and would become impartial and his independence would
be challenged under the Section 12 of the Arbitration and Conciliation Act, 1996 and also
under the Schedule 7 which bars the appointment of the arbitrator who has interest in the
outcome of the proceedings.

Also when Mr. Webber was appointed his appointment can also be challenged by the parties
as for an arbitrator to chair the proceedings should have some qualifications such as
1) Bright and knowledgable
2) Impartial
3) Has a lot of authority, experience
4) Available

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This are few of qualities which are perfect for the arbitrator who chairs the proceedings, but
here in this case, Mr. Webber was a lawyer having experience in arbitration but he lacks the
knowledge in terms of new technologies, so the parties can challenge the arbitrator.

Thus, these are the grounds of challenge for each one of the arbitrators appointed in this case
and chance of success of such challenges are also high.

Answer-2

I) The recourse that is available to the XYZ to enforce the arbitration agreement is that under
the section 8 of A&C act,1996 and article 8 of the Model Law 1985, it states about the
arbitration agreement and refer the parties to arbitration where there is arbitration agreement.
It states that when an action is brought in a matter which is the subject of an arbitration
agreement shall, if a party so requests not later than when submitting his first statement on
the substance of the dispute, refer the parties to arbitration unless it finds that the agreement
is void. Now another thing that needs to be looked is that court can only refer the parties if
the seat of the arbitration is in India and only then the part I of the Arbitration and
Conciliation act, 1996 will apply. Otherwise the recourse is that Under the Section 45 of the
A&C act, 1996 it has mandated that if there exist the arbitration agreement then judicial
authority needs to refer to it as the international commercial arbitration under the NYC
applies. Now here when the Court sees the prima facie case that is whether there exist the
valid arbitration agreement and if it exists then the court is mandated under the Section 8 and
the Section 45 to refer the parties to the arbitration.

So when we apply the provisions of A&C act, 1996, there exists the arbitration agreement
between the ABC and XYZ and court should refer the parties to the arbitration as the dispute
is arbitrable under the Section 8 of the Arbitration and Conciliation act, 1996.

II) The law applicable under the ad hoc arbitration proceedings in London is that ad hoc
arbitration is basically type of arbitration which are not governed by any institution and here
the parties have to choose the procedure for appointing the arbitrator, the language of the
arbitral proceedings and seat/venue of the arbitral proceedings. The laws that are applicable
to substance of the dispute are Section 11 or the Article 11 that is appointing the arbitrators.
The section 19/ Article 19 that states about the determining the rules of the procedure,
Section 20 or Article 20 that states about the place of arbitration. This all laws are applicable
under the substance of the dispute. In the following the dispute was that governing law was
Indian law but place of arbitration is London and venue being the Singapore. So here the seat
of the arbitration would be London as that would govern the proceedings and when the
parties choose London as the seat then Indian law would not apply.

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Answer -3

I) i) For an arbitration to become valid there are three things that are needed that are stated
under the Section 7/ Article 7 in the A&C act and Model Law, 1985 that the arbitration
agreement should be in form of arbitration clause in a contract or it can be in separate
agreement, it shall be in writing or also in electronic form, and if it is in writing than the
document should be signed by the parties. Now when we apply the provisions of Section 7
and Article 7, the arbitration agreement is valid as there is arbitration clause in the contract.

ii) In the following case, the arbitration agreement is not valid is the subject matter of
agreement is not arbitrable as stated in the case of Booz Allen vs Hamilton Inc, where the
subject matter is right in rem they are not arbitrable only right in personam are arbitrable and
held that when matter is of tenancy that are governed by special statutes than it is right in rem
and violates public policy thus not arbitrable and therefore this arbitration clause is not valid.

iii) In the following case, the arbitration agreement is valid because there is arbitration
agreement and parties consent to refer their disputes to arbitration and the terms and
conditions were on the unsigned invoices though but it was with accompanying the goods
which will be as to what the Section 7 of the A&C act, 1996 states and the parties have
shown and acted in that manner that stipulated in the invoice and Section 7(4)(b) provides
that an arbitration agreement can be in the nature of exchange of communication, which
provides a record of the agreement in writing. Thus,Valid.

III). In the following case, the Joint production agreement was between the Ambitious and
Booster Inc, but in the arbitration clause it had clearly mentioned that disputes arising out of
or relating to the JPA shall be resolved by arbitration at London, so here the Booster Inc was
Sister company of B and also when A supplied know-how, patents and technology 30% of
production is to be sold by A and B jointly and 70% is reserved for C which was purchased
from B, so here the agreement being the Joint production, the C will be liable to initiate the
arbitration proceedings against the A as the dispute was related to Joint production where B
will also be a party to suit as losses that C suffered was due to joint production done by A and
B. Thus C can initiate arbitration proceedings against A and B to recover losses.