ALTERNATIVE DISPUTE RESOLUTION- RESEARCH PROJECT

On
AN ANALYSIS OF INTERNATIONAL COMMERCIAL ARBITRATION

MAHARASHTRA NATIONAL LAW UNIVERSITY, AURANGABAD

Submitted to

Submitted by

KAJAL MHASAL (2019/BALLB/19)

BA LLB (HONS.) SEMESTER-VIII

Under the guidance of

Asst. Prof. Sakshi Gupta Professor (Alternative Dispute Resolution)

MNLU, Aurangabad

8 MARCH, 2023
 AN ANALYSIS OF INTERNATIONAL COMMERCIAL ARBITRATION

RECOGNITION

I would like to express my heartfelt gratitude to the esteemed Principles of Interpretation of

Statutes professor, Prof. Sakshi Gupta, for giving me opportunity to work on this project titled
An Analysis of International Commercial Arbitration. I tried to do my best to gather
information about the project in a number of ways in order to present a clear picture of the
given project subject.

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 AN ANALYSIS OF INTERNATIONAL COMMERCIAL ARBITRATION

DECLARATION

I, the undersigned, solemnly acknowledge that the project report on An Analysis of

International Commercial Arbitration, is based on my own work completed under the
supervision of my professor during the course of my studies. I say that the assertions made and
the findings reached are the product of my study. I also certify that:
I. The report's material is original, and it was produced by me under the general
guidance of my supervisor.
II. The work has not been applied to any other college for any other degree, diploma,
or credential in this university or any other Indian or foreign university.
III. In preparing the research, I followed the university's guidance.
IV. When I use materials (data, analytical research, and text) from other sources, I
credited them in the report's text and included their contact information in the
references.

KAJAL MHASAL

2019/BALLB/19

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 AN ANALYSIS OF INTERNATIONAL COMMERCIAL ARBITRATION

TABLE OF CONTENTS

1. RECOGNITION ........................................................................................................ 2

2. DECLARATION ....................................................................................................... 3

3. ABSTRACT ............................................................................................................... 5

4. INTRODUCTION ..................................................................................................... 5

5. SIGNIFICANCE OF THE STUDY ........................................................................... 6

6. OBJECTIVE OF THE STUDY ................................................................................. 7

7. CONTEMPORARY LEGAL RELEVANCE ............................................................ 7

8. REVIEW OF THE LITERATURE............................................................................ 8

9. RESEARCH METHODOLOGY ............................................................................... 9

10. HYPOTHESIS ........................................................................................................... 9

11. SCOPE & LIMITATIONS OF THE STUDY ......................................................... 10

12. INTERNATIONAL COMMERCIAL ARBITRATION – MEANING .................. 10

13. INTERNATIONAL COMMERCIAL ARBITRATION WITH SEAT IN INDIA . 11

14. CONCLUSION ........................................................................................................ 18

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 AN ANALYSIS OF INTERNATIONAL COMMERCIAL ARBITRATION

ABSTRACT

In this project, the researcher analysed International commercial arbitration which is a

process used to resolve disputes between parties engaged in international trade. It is a form
of alternative dispute resolution that involves the use of a neutral third party, the arbitrator,
who is appointed by the parties or selected through an arbitral institution. The arbitration
process is governed by the rules of a chosen arbitration institution or the parties' agreement.
Arbitration provides many advantages, including flexibility, confidentiality, and the ability to
choose an expert in the subject matter of the dispute as the arbitrator. It is also more efficient
and cost-effective than litigation in many cases, as the parties have greater control over the
process and can avoid lengthy court proceedings.
However, international commercial arbitration also presents challenges, such as the potential
for inconsistent decisions across different jurisdictions and the difficulty of enforcing awards
in certain countries. These issues can be addressed through the careful drafting of arbitration
agreements and the use of international conventions such as the New York Convention on the
Recognition and Enforcement of Foreign Arbitral Awards.
Overall, international commercial arbitration is a valuable tool for resolving disputes in the
global marketplace, providing parties with a flexible and efficient process for resolving
disputes and promoting international trade and investment.

Keywords: International, Commerce, Arbitration.

INTRODUCTION

The Arbitration and Conciliation Act was introduced in India in 1996 and went into effect on
August 22 of the same year. Maintaining hostile relations while doing domestic and
international commerce was the major goal of the Arbitration and Conciliation Act's
introduction. It was also used to lessen the function of the courts and to ease their workload.
Arbitration is the process of settling disagreements between parties by presenting them before
a third, impartial person. The arbitrator is the name given to this third person. The goal of using
arbitration is to settle a dispute without incurring the expense and time of going to court, which
lessens the burden of litigation. The arbitrator's ruling, made at the conclusion of the arbitration,
is enforceable against both parties.
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The arbitrator, who is chosen by the parties or by the statutory authority, conducts an inquiry
during the arbitration process to ascertain the origin of the dispute between the parties. There
is no room for compromise in arbitration because the primary goal is adjudication. The
arbitrator imposes their neutral and fair point of view after identifying the source of the dispute
and hearing from each party.
Without the arbitration agreement, the arbitration process would not be possible. A document
that two parties voluntarily sign called an arbitration agreement specifies that any disputes
between them arising from that particular contract must be settled outside of court by
appointing a third-party arbitrator who will be impartial in the matter.
The Arbitration and Conciliation Act's Section 2(1)(b) and Section 7 both define the arbitration
agreement. The Arbitration and Conciliation (Amendment) Ordinance, 2020 was recently
introduced in the year 2020, amending the Arbitration and Conciliation Act. This regulation
was focused on the court-verified unconditional stay of the enforcement of arbitral awards and
the accreditation of arbitrators.
SIGNIFICANCE OF THE STUDY

Studying international commercial arbitration is significant for several reasons:

1. Globalization: With the expansion of international trade and investment, disputes

between parties from different countries are increasingly common. International
commercial arbitration offers a flexible and efficient mechanism for resolving these
disputes.

2. Autonomy: Parties to an international commercial arbitration have greater autonomy

and control over the process than they would in litigation. They can choose the
arbitrators, the applicable law, and the language of the proceedings.

3. Enforceability: Awards issued by international commercial arbitrators are generally

easier to enforce across borders than court judgments. The New York Convention on
the Recognition and Enforcement of Foreign Arbitral Awards, signed by over 160
countries, provides a framework for enforcing arbitral awards.

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4. Expertise: International commercial arbitrators are often selected for their expertise in
a particular industry or area of law. As a result, parties can benefit from a decision-
maker who has a deeper understanding of their business and legal issues.

5. Confidentiality: International commercial arbitration proceedings are generally

confidential, which can be advantageous for parties who want to avoid negative
publicity or protect sensitive information.

Overall, studying international commercial arbitration is significant for anyone interested in

international business, law, or dispute resolution.

OBJECTIVE OF THE STUDY

The primary objective of international commercial arbitration is to provide a neutral and

efficient forum for resolving disputes between parties engaged in international business
transactions. Arbitration allows parties to avoid potentially lengthy and costly court
proceedings, and instead, resolve their disputes in a private and confidential setting with the
help of an arbitrator or panel of arbitrators who are experts in the relevant legal and commercial
fields.

The goal of international commercial arbitration is to provide a fair and impartial process for
resolving disputes that allows parties to obtain a final and binding decision that is enforceable
in multiple jurisdictions under international treaties, such as the New York Convention on the
Recognition and Enforcement of Foreign Arbitral Awards. By offering a flexible and efficient
alternative to court litigation, international commercial arbitration aims to promote
international trade and commerce by reducing the risks and uncertainties associated with cross-
border transactions.

CONTEMPORARY LEGAL RELEVANCE

International commercial arbitration is a widely used mechanism for resolving disputes

between parties from different countries that have entered into a commercial agreement. Its
contemporary significance lies in its ability to provide a neutral, efficient, and effective means
of resolving cross-border commercial disputes, particularly in the face of increasing
globalization and international trade.
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Here are a few examples of the contemporary significance of international commercial

arbitration:

Cross-border trade and investment: With the rise of global trade and investment, more and
more companies are engaging in cross-border transactions. International commercial
arbitration provides a reliable means of resolving disputes that may arise from such
transactions, allowing businesses to mitigate risks and avoid costly and time-consuming
litigation in foreign courts.

Diverse legal systems: When parties from different countries enter into a commercial
agreement, they may be subject to different legal systems, making it difficult to resolve disputes
through traditional legal channels. International commercial arbitration allows parties to
choose a neutral venue and applicable law, providing a more predictable and efficient means
of resolving disputes.

Enforcement of awards: International commercial arbitration awards are recognized and

enforceable under the New York Convention on the Recognition and Enforcement of Foreign
Arbitral Awards, making them an attractive alternative to traditional litigation in foreign courts.

Confidentiality: Unlike court proceedings, international commercial arbitration proceedings

are generally confidential, allowing parties to keep sensitive information out of the public eye.

Overall, the contemporary significance of international commercial arbitration lies in its ability
to provide a reliable and efficient means of resolving cross-border commercial disputes, while
also promoting international trade and investment.

REVIEW OF THE LITERATURE

There is a significant body of literature on international commercial arbitration, spanning legal,

economic, and social science perspectives.

Legal Perspective: From a legal perspective, the literature on international commercial

arbitration covers a range of topics, including the law and practice of international commercial
arbitration, the role of the arbitral tribunal, the enforceability of arbitral awards, and the
relationship between arbitration and national courts. Some of the key authors in this field
include Gary Born, Julian Lew, Emmanuel Gaillard, and William Park.

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Overall, the literature on international commercial arbitration is vast and multifaceted,

reflecting the diverse interests and perspectives of scholars, practitioners, and stakeholders in
the field. While there is ongoing debate and discussion about the optimal role of arbitration in
resolving international disputes, there is no doubt that international commercial arbitration will
continue to be an important mechanism for resolving cross-border disputes in the years to
come.

RESEARCH METHODOLOGY

The study is based on the secondary source of information. Data is collected from books,
Journals, websites. An analysis of Several articles, books and others records connected with
the topic had been done. A while later, the gathered materials specifically classified
understanding to their pertinence. Under each topic, the sub-subjects framed and comparative
thoughts gathered into similar index and dissimilar thoughts treated independently.
Mode of Writing
A descriptive and analytical method of writing has been followed.
Mode of Citation
A uniform mode of Citation has been followed.

HYPOTHESIS

Hypothesis: International commercial arbitration provides an effective alternative dispute

resolution mechanism for cross-border commercial disputes due to its flexibility, neutrality,
enforceability, and confidentiality.

Explanation: International commercial arbitration is a form of dispute resolution in which

parties agree to submit their dispute to an impartial third party for resolution instead of going
to court. The process takes place in a private setting, and the parties have more control over the
procedures and the choice of arbitrator(s).

Moreover, arbitration is confidential, and parties can keep their dispute and its outcome out of
the public record. This can be particularly important for companies that do not want to damage
their reputation or disclose confidential information.

Based on these advantages, it can be hypothesized that international commercial arbitration

provides an effective alternative dispute resolution mechanism for cross-border commercial
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disputes. By avoiding court litigation, parties can save time, money, and resources, and they
can also preserve their business relationships.

SCOPE & LIMITATIONS OF THE STUDY

While there are many benefits to international commercial arbitration, there are also some
limitations and scope that should be considered:
Limitations of International Commercial Arbitration:
1. Enforcement: Although most countries have ratified the New York Convention, which
provides for the recognition and enforcement of arbitral awards, some countries may
not recognize the award or may have specific requirements for enforcement.
2. Costs: International commercial arbitration can be expensive, as parties need to pay for
the arbitrators' fees, legal representation, and administrative costs.
3. Limited discovery: Unlike litigation, the parties have limited discovery in arbitration,
which may limit their ability to obtain evidence.
4. Limited appeals: The decisions made in international commercial arbitration are final
and binding, with limited rights of appeal, which may be a disadvantage for some
parties.
5. Confidentiality: Although confidentiality is one of the benefits of international
commercial arbitration, it may also be a limitation, as it may limit the parties' ability to
use the outcome of the arbitration as a precedent for future disputes.
In conclusion, international commercial arbitration can be a useful and efficient method of
resolving disputes between parties from different countries. However, parties should also be
aware of the limitations and scope of the process before agreeing to it.
INTERNATIONAL COMMERCIAL ARBITRATION – MEANING

Section 2(1)(f) of the Act defines an ICA as an arbitration relating to disputes arising out
of a legal relationship which must be considered commercial,1where either of the parties is
a foreign national or resident, or is a foreign body corporate or is a company, association or
body of individuals whose central management or control is in foreign hands. Thus, under
Indian law, an arbitration with its seat in India, involving a foreign party is regarded as an
ICA. All arbitrations seated in India including ICAs are subject to Part I of the Act.

1
‘Commercial’ should be construed broadly having regard to the manifold activities which are an integral part of
international trade today (R.M. Investments & Trading Co. Pvt. Ltd. v. Boeing Co., AIR 1994 SC 1136).
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However, where an arbitration is seated outside India, Part I of the Act would not apply,
except Sections 9, 27 and 37, unless the parties have agreed to exclude the applicability of
these sections.

Prior to the 2015 Amendment Act, a literal interpretation of Section 2(1)(f)(iii) would yield
that even if a company had its place of incorporation as India, an arbitration could still
qualify as an ICA if the central management and control of the company was outside India.
However, in the case of TDM Infrastructure Pvt. Ltd. v. UE Development India Pvt. Ltd.,2
(“TDM Infrastructure”) despite TDM Infrastructure Pvt. Ltd. having foreign control, the
Supreme Court concluded that “a company incorporated in India can only have Indian
nationality for the purpose of the Act”. Thus, though the Act then recognized that arbitration
involving companies with management and control outside India as an ICA, the Supreme
Court still treated such arbitration involving foreign controlled but Indian incorporated
company as domestic arbitration. The 2015 Amendment Act deleted the words ‘a company’
from the Section 2(1)(f)(iii) thereby restricting the scope therein to only body of individuals
or an association. Therefore, the current position is that if a company has its place of
incorporation as India, then the place of central management and control of the company is
irrelevant for the determination of the status of the arbitration.

In a recent case, where an Indian company was the lead partner in a Mumbai-based
consortium (which also included foreign companies) and was the determining voice in
appointing the chairman, the Supreme Court held that the central management and control
was in India.3

INTERNATIONAL COMMERCIAL ARBITRATION WITH SEAT IN INDIA

The law applicable to ICA when the seat of arbitration is in India is discussed below.

I. Notice of Arbitration

Under Section 21, arbitration commences when the notice of arbitration that requests for that
dispute to be referred to arbitration is received by the opposite party (“Notice of Arbitration”).

2
(2008) 14 SCC 271.
3
M/s. Larsen and Toubro Ltd. SCOMI Engineering BHD v. Mumbai Metropolitan Region Development
Authority, 2018 SCC OnLine SC 1910.
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The day on which the respondent receives the notice, arbitral proceedings commence under the
Act. In a Notice of Arbitration, a party communicates:

a) an intention to refer the dispute to arbitration; and

b) the requirement that other party should do something on his part in that regard.

This will generally suffice to define the commencement of arbitration under the Act.
Commencement of Arbitration & the applicability of 2015 Amendment Act. The date of
commencement of the arbitration in accordance with Section 21 of the Act is crucial with
regards the applicability of the 2015 Amendment Act. In the event, the date of commencement
is on or after October 23, 2015, the provisions of the Act as amended by the 2015 Amendment
Act is applicable.

II. Referral to Arbitration

Under Part I, the courts can refer the parties to arbitration if the subject matter of the dispute is
governed by the arbitration agreement. Section 8 of the Act provides that if an action is brought
before a judicial authority, which is the subject-matter of an arbitration agreement, upon an
application by a party, the judicial authority is bound to refer the dispute to arbitration.

It is important to note that the above application must be made by the party either before or at
the time of making his first statement on the substance of the dispute, and be accompanied by
a duly certified or original copy of the arbitration agreement, and such an agreement need not
be signed for it to be considered valid.4 However, it has been held that there is no requirement
of filing a formal application seeking a specific prayer for reference, as long as the party raised
an objection on the maintainability of the suit in light of the arbitration clause.5

Recently, the Supreme Court in Indus Biotech Pvt. Ltd v. Kotak India Venture,6 held that a
Section 8 application under the Act would not be maintainable when an application under
Section 7 of the Insolvency and Bankruptcy Code 2016 (“IBC”) is admitted, on the premise
that the dispute becomes non-arbitrable upon its admission and it would create a third-party
interest, and will have an erga omnes effect. It further held that even when a Section 8

4
M/s. Caravel Shipping Services Pvt. Ltd. v. M/s. Premier Sea Foods Exim Pvt. Ltd., 2018 SCC OnLine SC 2417.
5
Parasramka Holding Pvt. Ltd. & Ors. v. Ambience Pvt. Ltd. & Anr., 2018 SCC OnLine Del 6573.
6
Indus Biotech Pvt. Ltd v. Kotak India Venture , 2021 6 SCC 436.
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application under the IBC is filed prior to admission of Section 7 application of IBC, the
adjudicating authority must first decide the application under Section 7 of IBC.

The 2015 Amendment Act introduced express words in Section 8 clarifying that at the stage of
determining whether to refer the parties to arbitration, the court only makes a prima facie
determination on the existence of the arbitration agreement. In this regard, an arbitration
agreement has been considered to be valid if there is merely the incorporation of another
document/clause (relating to arbitration) by reference,7 or even if there is a general reference
to a standard form of the contract of one party.8 In such situations, the intention of the parties9
and consensus ad idem of the parties is critical, even if the same is apparent from their
conduct.10

III. Interim Reliefs

Under the Act, parties to an arbitration agreement can seek interim relief from courts and
arbitral tribunals under Sections 9 and 17 respectively. A party may, before, or during arbitral
proceedings or at any time after the making of the arbitral award but before it is enforced (in
case of domestic awards), apply to a court for seeking interim measures and protections,
including interim injunctions, under Section 9 of the Act. However, courts have held that an
application under Section 9 can only be filed by a successful party after the award is made.11

A. Interim Reliefs Under Section 9

1. If an arbitral tribunal has been constituted, an application for interim protection under Section
9 of the Act will not be entertained by the court unless the court finds that circumstances exist
which may render the remedy provided under Section 17 inefficacious. However, if the court
has already entertained the application and applied its mind to it, the bar under Section 9(3)
would not apply and the court would continue to hear the application and make the order, even
if the tribunal has been constituted in the meantime.12

7
Elite Engineering v. Techtrans Construction India, (2018) 4 SCC 281.
8
M/s Inox Wind Ltd. v. M/S. Thermocables Ltd., (2018) 2 SCC 519.
9
Elite Engineering v. Techtrans Construction India, (2018) 4 SCC 281.
10
OK Play Auto Pvt. Ltd. v. Indian Commerce and Industries, 2018 SCC OnLine Del 8525.
11
Dirk India Private Limited v. Maharashtra State Electricity Generation Company Limited, 2013 (7) Bom.C.R
493; Tecnimont Private Limited & Anr. vs Ongc Petro Additions Limited, 2020 SCC OnLine Del 653.
12
Arcelor Mittal Nippon Steel India Ltd. v. Essar Bulk Terminal Ltd. 2021 SCC OnLine SC 797.
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2. Post the grant of interim protection under Section 9 of the Act, the arbitral proceedings must
commence within a period of 90 (ninety) days from the date of the interim protection order or
within such time as the court may determine.

3. Interim measures under Section 9 can be granted by courts against third parties as well, in
certain circumstances.13

4. Interim relief is only available against the “fruits” of the arbitral award.14

B. Interim Reliefs Under Section 17

Section 17 has been amended to provide an arbitral tribunal with the same powers as a ‘civil
court’ in relation to the grant of interim measures. Further, the order passed by an Arbitral
Tribunal in arbitrations seated in India is now deemed to be an order of the court and is
enforceable under the Code of Civil Procedure, 1908 (“CPC”) as if it were an order of the court,
which provides clarity on its enforceability. The underlying intention was to vest significant
powers with the Arbitral Tribunal and reduce the burden and backlog before the courts.

IV. Appointment of Arbitrators

The parties are free to agree on a procedure for appointing the arbitrator(s). In absence of any
agreement on the procedure for the appointment of arbitrators, for a tribunal with three
arbitrators, each party will appoint one arbitrator and the two appointed arbitrators will appoint
the third arbitrator who will act as a presiding arbitrator.15 If one of the parties does not appoint
an arbitrator within 30 days, or if the two appointed arbitrators fail to appoint the third arbitrator
within 30 days, the party can request the Supreme Court or relevant High Court (as applicable)
to appoint an arbitrator.16 However, if the parties have entered into an agreement with a
particular mechanism for appointment of arbitrator, it is not open to ignore it and invoke the
exercise of powers in Section 11(6) of the Act.17

V. Conduct of Arbitral Proceedings

A. Flexibility in Respect of Procedure, Place and Language

13
Value Advisory Services v. ZTE Corporation (2009) 3 Arb LR 315; Blue Coast Infrastructure Development
Pvt. Ltd. v. Blue Coast Hotels Ltd. & Ors. O.M.P. (I) (COMM) No. 35/2020 and I.A. 3251/2020.
14
Zostel Hospitality Pvt. Ltd. Oravel Atays Private Ltd., OMP (I) (COMM>) 290/2021.
15
Section 11(3) of the Act.
16
Section 11(6) of the Act.
17
CG Tollway v. NHAI, 2021 SCC OnLine Del 4838.
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The arbitral tribunal should treat the parties equally and each party should be given full
opportunity to present its case.18 The arbitral tribunal is not bound by the CPC or the Indian
Evidence Act, 1872.19 The parties to the arbitration are free to agree on the procedure to be
followed by the arbitral tribunal. If the parties do not agree to the procedure, the procedure will
be as determined by the arbitral tribunal. The arbitral tribunal has complete powers to decide
the procedure to be followed unless parties have otherwise agreed upon the procedure to be
followed.20 The arbitral tribunal also has powers to determine the admissibility, relevance,
materiality and weight of any evidence.21 The place of arbitration can be decided by mutual
agreement. However, if the parties do not agree to the place, the same will be decided by the
tribunal.22 Similarly, the language to be used in arbitral proceedings can be mutually agreed
upon. Otherwise, the arbitral tribunal can decide on the same.23

While interpreting the term ‘place’ in relation to ‘seat’, the Supreme Court in Union of India
v. Hardy Exploration and Production,116 has held that: (a) when only the term ‘place’ is
stated or mentioned and no other condition is postulated, it is equivalent to ‘seat’ and that
finalizes the facet of jurisdiction. But if a condition precedent is attached to the term ‘place’,
the said condition has to be satisfied so that the place can become equivalent to the seat; (b) a
venue can become a seat if something else is added to it as a concomitant. However, the
Supreme Court in BGS Soma held that the Supreme Court’s judgment Union of India v. Hardy
Exploration and Production is not good law as it is contrary to the five-judge bench decision in
BALCO.24

B. Submission of Statement of Claim and Defense

The Claimant should submit the statement of claim, points of issue and the relief or remedy
sought. The Respondent should state his defence in respect of these particulars. All relevant
documents must be submitted. Such claim or defence can be amended or supplemented at any
time.25

Time period for completion of pleadings

18
Section 18 of the Act.
19
Section 19(1) of the Act
20
Section 19(3) of the Act.
21
Section 19(4) of the Act.
22
Section 20 of the Act.
23
Section 22 of the Act
24
(2012) 9 SCC 552.
25
Section 23 of the Act.
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The 2015 Amendment Act permits Respondent to submit a counterclaim or plead a set-off
provided such set-off or counterclaim falls within the scope of the arbitration agreement.26 The
arbitral tribunal, under the amended Section 25 of the Act, can also exercise its discretion in
treating the right of the defendant to file the statement of defence as forfeited under specified
circumstances.27

C. Hearings and Written Proceedings

After submission of pleadings, unless the parties agree otherwise, the arbitral tribunal can
decide whether there will be an oral hearing or whether proceedings can be conducted on the
basis of documents and other materials. However, if one of the parties requests the arbitral
tribunal for a hearing, sufficient advance notice of hearing should be given to both
parties.28Thus, unless one party requests, an oral hearing is not mandatory.

D. Fast Track Procedure

The 2015 Amendment Act inserted new provisions to facilitate an expedited settlement of
disputes based solely on documents subject to the agreement of the parties. The tribunal, for
this purpose, consists only of a sole arbitrator, who shall be chosen by the parties.29

For the stated purpose the time limit for making an award under this section has been capped
at 6 months from the date the arbitral tribunal enters upon the reference.30

VI. Settlement During Arbitration

It is permissible for parties to arrive at a mutual settlement even when the arbitration
proceedings are going on. In fact, even the tribunal can make efforts to encourage mutual
settlement. If parties settle the dispute by mutual agreement, the arbitration shall be terminated.
However, if both parties and the arbitral tribunal agree, the settlement can be recorded in the
form of an arbitral award on agreed terms, which is called a consent award. Such an arbitral
award shall have the same force as any other arbitral award.31

26
Section 23(2A) of the Act.
27
Section 25(b) of the Act.
28
Section 29 of the Act.
29
Section 29B (2) of the Act.
30
Section 29B (4) of the Act.
31
Section 30 of the Act.
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Under Section 30 of the Act, even in the absence of any provision in the arbitration agreement,
the arbitral tribunal can, with the express consent of the parties, mediate or conciliate with the
parties, to resolve the disputes referred for arbitration.

VII. Law of Limitation Applicable

The Limitation Act, 1963 is applicable to arbitrations under Part I. For this purpose, the date
on which the aggrieved party requests the other party to refer the matter to arbitration shall be
considered. If on that date, the claim is barred under the Limitation Act, the arbitration cannot
continue.32

VIII. Arbitral Award

A decision of an arbitral tribunal is termed as an ‘arbitral award’. An arbitral award includes

interim awards. However, it does not include interim orders passed by arbitral tribunals under
Section 17. The decision of the arbitral tribunal must be by a majority. 33 The arbitral award
must be in writing and signed by all the members of the tribunal.34 It must state the reasons for
the award unless the parties have agreed that no reason for the award is to be given. 35 The
arbitral award should be dated and the place where it is made should be mentioned (i.e. the seat
of arbitration).36 A copy of the award should be given to each party. Arbitral tribunals can also
make interim awards.37

IX. Stamping of an Arbitral Award

The Indian Stamp Act, 1899 provides for stamping of arbitral awards with specific stamp duties
and Section 35 provides that an award which is unstamped or is insufficiently stamped is
inadmissible for any purpose, which may be validated on payment of the deficiency and penalty
(provided it was original). Issues relating to the stamping and registration of an award or
documentation thereof, may be raised at the stage of enforcement under the Act. 38 Recently,
the Delhi HC, in the case of Mohini Electricals Ltd. v. Delhi Jal Board39 held that stamp duty
on an award should be paid at the time of enforcement, unless the parties mutually decide to

32
Section 43(2) of the Act.
33
Section 29 of the Act.
34
Section 31(1) of the Act.
35
Section 31(3) of the Act.
36
Section 31(4) of the Act.
37
Section 31(6) of the Act.
38
M. Anasuya Devi and Anr v. M. Manik Reddy and Ors., (2003) 8 SCC 565.
39
Mohini Electricals Ltd. v. Delhi Jal Board, OMP (ENF)(COMM) 2 of 2020.
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accept the award, thereby dispensing with the formality of instituting an enforcement petition.
The Court held that the arbitrator does not have the statutory power to direct that stamp duty
be paid within a specific period.40

X. Challenge to an Award

Section 34 provides for the manner and grounds for challenge of the arbitral award. The time
period for the challenge is before the expiry of 3 months from the date of receipt of the arbitral
award (and a further period of 30 days on sufficient cause being shown for condonation of
delay). If that period expires, the award holder can apply for execution of the arbitral award as
a decree of the court. But as long as this period has not elapsed, enforcement is not possible.

CONCLUSION

For a rapidly expanding economy to be able to draw in foreign investment, a trustworthy, stable
conflict resolution procedure is essential. Commercial players in India and overseas have
established a strong preference for using arbitration to settle disputes due to the enormous
backlog of cases before Indian courts. Although being one of the initial signatories to the New
York Convention, India has not always adhered to the best standards around the world in
arbitration. Yet, there has been a noticeable improvement in strategy over the past five years.
In order to bring Indian arbitration legislation in line with the world's best practises, courts and
legislators have taken action.
There is hope that these best practises may soon be incorporated into Indian arbitration law
because of the courts' pro-arbitration stance and the current 2015, 2019 and 2021 Amendment
Acts. There are exciting times ahead for Indian arbitration law, and our courts are prepared to
handle a number of cases involving the interpretation of the Act's numerous modifications.

40
M/S. Shri Ram EPC Ltd. v. Rioglass Solar SA (2018) SCC Online 147.
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 AN ANALYSIS OF INTERNATIONAL COMMERCIAL ARBITRATION

RECOMMENDATIONS

Here are some recommendations for improvement in international commercial arbitration:

1. Promote diversity and inclusion: The arbitration industry has been criticized for its lack
of diversity and inclusion. Efforts should be made to promote diversity and inclusion
among arbitrators, institutional staff, and practitioners to ensure that the industry is
more representative of the global community it serves.

2. Enhance transparency: Greater transparency in the arbitration process can help to build
trust and confidence in the system. This could include disclosing information about the
appointment of arbitrators, the selection of arbitral institutions, and the cost of
arbitration.

3. Improve efficiency: The time and cost involved in international commercial arbitration
can be a barrier to access to justice. Efforts should be made to improve the efficiency
of the process, for example, through the use of technology, streamlining procedures,
and encouraging arbitrators to manage cases more proactively.

4. Address conflicts of interest: Conflicts of interest among arbitrators and institutional

staff can undermine the integrity of the arbitration process. Greater scrutiny should be
given to potential conflicts of interest, and clear rules and procedures should be in place
to address them.

5. Promote consistency: The lack of consistency in arbitral awards can lead to uncertainty
and unpredictability for parties. Efforts should be made to promote consistency in the
interpretation and application of the law by arbitrators.

6. Encourage training and education: Training and education are essential for building the
skills and knowledge of arbitrators, institutional staff, and practitioners. Efforts should
be made to encourage training and education at all levels of the industry.

7. Ensure enforceability of awards: The enforceability of arbitral awards is a fundamental

feature of international commercial arbitration. Efforts should be made to ensure that
awards are enforceable in a timely and effective manner, both domestically and
internationally.

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