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Presentation at
Annual ConferenceOrganized byOrganized by
The Institute of Company Secretaries of India
On 15th September 2019
At Motel Shiraz, Bhopal
By Advocate & IP Anil ChawlaSenior Partner,
Anil Chawla Law Associates LLP
www.indialegalhelp.com
This Presentation gives the presenter’s views on the subject. It gives no legal advice. It is not intended to be either complete or exhaustive narration of the subject.
A. Understanding Arbitration
A1. Domestic vs. International Arb.
B. Ad-hoc Arbitration Key
Points
B1. Domestic in IndiaA2. Domestic vs. Foreign Award
A3. Place – Seat and Venue
A4. Ad-hoc vs. Institutional
A5. Format of Agreement
A6. Key Issues
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B1. Domestic in India
B2. Domestic outside India
B3. International In India
B4. International Outside India
This Presentation as well as our Guide on the subject available at www.indialegalhelp.com
A1. Domestic vs. International Arbitration
Commercial Arbitration
Domestic Arbitration International Arbitration
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Site in India
Domestic Award
Site outside India
Domestic Award
Foreign Award
Site in India
Domestic Award
Site outside India
Domestic Award
Foreign Award
A1. Domestic vs. International Arb. (Continued)
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Section 2(f) of The Arbitration and Conciliation Act, 1996
A1. Domestic vs. International Arb. (Continued)
For arbitration to be “international”, at least one of the parties ought to be:
� Indian citizen (passport-holder) living outside India
� Citizen of any country other than India
� Company incorporated outside India (even when the company is owned
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wholly by Indian resident citizens)
� A NGO whose central management and control is exercised from outside
India (even when the controlling office located outside India is operated
wholly by Indian citizens)
� A foreign government
Relationship ought to be (a) legal (b) commercial. Need not be contractual.
Absence of a contract does not create a bar.
A2. Domestic vs. Foreign Award
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Section 44 of The Arbitration and Conciliation Act, 1996
A2. Domestic vs. Foreign Award (Continued)
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First Schedule of The Arbitration and Conciliation Act, 1996
A3. Seat / Place & Venue
� Parties to an Agreement are free to decide the seat or place of arbitration.
� Seat of arbitration is not just a geographical decision.
� Seat determines the courts under whose judicial supervision and control.
� Seat has to be differentiated from venue of arbitration.
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� Seat has to be differentiated from venue of arbitration.
� Proceedings may be held at different places and even by video
conferencing. Notwithstanding meetings at different places, courts at the
seat will have jurisdiction over the arbitration.
� Seat is decided by the Parties. Venue(s) is / are decided by the arbitrators.
� There may be more than one venue, but there will be only one seat of
arbitration.
� Seat / place determines whether award is domestic or foreign.
A4. Ad-hoc vs. Institutional
The following define whether arbitration is ad-hoc or institutional:
� Venue - Arbitration Institution provides basic infrastructure.
� Panel of Arbitrators - Appointment of arbitrators from Arbitration Institution’s panel.
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� Panel of Arbitrators - Appointment of arbitrators from Arbitration Institution’s panel.
� Appointing Authority - Arbitration Institution has authority to appoint the arbitrators.
� Administration of Arbitration - Arbitration Institution provides administrative services like
sending notices etc.
� Rules of Arbitration - Parties may accept the Arbitration Institution’s rules or may choose
some other rules. For example, arbitration conducted at London Court of International
Arbitration using UNCITRAL Rules.
A4. Ad-hoc vs. Institutional (Continued)
Parameter Ad-hoc Arbitration Institutional Arbitration
Administration Low efficiency High efficiency
Reputation Depends on individual
arbitrators
High depending on
institution
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arbitrators institution
Costs Less expensive More expensive
Control Completely by parties Professionally by the
Institution
Flexibility More flexible Less flexible
Supervision No supervision By the Institution
Remuneration of
Arbitrators
Depends on individual
arbitrators
Decided by Institution
A5. Format of Agreement
� Need not be a formal agreement.
� E-mail correspondence can amount to an agreement.
� Must be in writing (other than oral).
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� Must be in writing (other than oral).
� May be part of an agreement or may be a separate arbitration agreement.
� Defined legal relationship is must. Non-contractual but commercial relationships are
covered.
� Under law, no format for either arbitration clause or arbitration agreement.
� Institutions often have their standard clauses.
A5. Format of Agreement (Continued)
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A6. Key Issues
� Law - (a) the law that will govern the Agreement (Law of one country or the other or UNIDROIT
Principles of International Commercial Contracts) (b) law for the arbitration and (c) the law
controlling conduct of arbitration (Rules of one country or the other or of the institution or UNCITRAL
Rules).
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� Place / Seat and Venue (as discussed in previous slides).
� Appointment of Arbitrators - Provide procedure for appointment of arbitrators.
Either be ad-hoc or institutional.
� Appointing Authority - Ad-hoc or institutional.
� Qualification of Arbitrators - Neutral, impartial and independent of both the
parties.
� Language - Must be stated in explicit terms without any ambiguity.
A6. Key Issues (Continued)
� Number of Arbitrators - Always odd in numbers. Single arbitrator also possible.
Presumed to be single under Indian law. Presumed to be three under UNCITRAL.
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A6. Key Issues (Continued)
� Powers of Courts – In case of international arbitration, the Parties may decide to
stop application of sections 9, 27 and 37(3) and 37(1)(b).
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Sub-section 2(2) of the Arbitration and Conciliation Act, 1996
A6. Key Issues (Continued)
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A6. Key Issues (Continued)
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A6. Key Issues (Continued)
� Appeal / Two Stage Process – First stage may have a solo arbitrator with second
stage having three arbitrators.
� Costs – Often each side bears his own costs, Pay your own way (PYOWA) /
Unsuccessful bears the full costs, Costs follow the event (CFTEA). (Sub-section 31A(2)
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Unsuccessful bears the full costs, Costs follow the event (CFTEA). (Sub-section 31A(2)
of the Arbitration and Conciliation Act, 1996).
B1. Domestic in India
� Takes place between two Indian Parties.
� Jurisdiction is of Indian law as well as Indian courts.
� Part I of The Arbitration and Conciliation Act, 1996 is applicable.
Key points:
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Law governing Agreement Has to be necessarily Indian law.
Law for arbitration The Act
Curial Law Need not be specified as the arbitration is under
provisions of the Act.
Place of arbitration Seat to be at a place within India. For the sake of
convenience, meetings / proceedings may be held
alternately at the respective cities of the parties.
B1. Domestic in India (Continued)
Number of Arbitrators Three is almost the norm.
Appointment of Arbitrator Each party to appoint one arbitrator. The two arbitrators to
select the Presiding Arbitrator.
Appointing Authority Need not be specified since section 11 of the Act provides
the powers to High Court.
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Qualification of Arbitrators If some technical knowledge is required, advisable to
specify.
Language English unless both parties are comfortable with some
other language.
Appeal Not recommended
Costs During the proceedings each party bears its own.
Cost Allocation – By the Arbitration Panel in award.
B2. Domestic Outside India
� Unusual situation. To be resorted to only when there are compelling reasons.
Law governing
Agreement
Has to be necessarily Indian law.
Law for arbitration Parties are free to choose. If Indian law is not
chosen, please take care to mention that Part I of
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chosen, please take care to mention that Part I of
the Act will NOT apply.
Curial Law UNCITRAL Rules / ICSID Rules are two common
options.
Place of arbitration A neutral location may be chosen. The country
where the foreign parent is located will put the
other party at a disadvantage and should hence be
avoided by the other party.
B2. Domestic Outside India (Continued)
Number of Arbitrators Three is almost the norm.
Appointment of
Arbitrator
Each party to appoint one arbitrator. The two
arbitrators to select the Presiding Arbitrator.
Appointing Authority Need not be specified since the chosen Curial Law
will often have a provision.
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Qualification of
Arbitrators
If some technical knowledge is required, it is
advisable to specify.
Language English unless both parties are comfortable with
some other language.
Appeal Not recommended
Costs During the proceedings each party bears its own.
Cost Allocation – By the Arbitration Panel in award.
B3. International in India� Law governing the agreement is a critical issue. Six options for an India-UK agreement:
a) This Agreement shall be governed by Indian law. OR
b) This Agreement shall be governed by the law of UK. OR
c) This Agreement shall be governed by the UNIDROIT Principles of International Commercial
Contracts (2016). OR
d) This Agreement shall be governed by the UNIDROIT Principles of international Commercial
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d) This Agreement shall be governed by the UNIDROIT Principles of international Commercial
Contracts (2016) and, with respect to issues not covered by such Principles, by generally accepted
principles of international commercial law. OR
e) This Agreement shall be governed by the UNIDROIT Principles of International Commercial
Contracts (2016) and, with respect to issues not covered by such Principles, by the law of India.
OR
f) This Agreement shall be governed by the UNIDROIT Principles of International Commercial
Contracts (2016) and, with respect to issues not covered by such Principles, by the law of UK.
B3. International in India (Continued)
Law governing
Agreement
One of the six options given above.
Law for arbitration Part I of Arbitration and Conciliation Act, 1996 will
apply.
Curial Law UNCITRAL Rules / ICSID Rules are two common
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Curial Law UNCITRAL Rules / ICSID Rules are two common
options.
Place of arbitration Specify the place in India.
Number of Arbitrators Three is almost the norm.
Appointment of
Arbitrator
Each party to appoint one arbitrator. The two
arbitrators to select the Presiding Arbitrator.
B3. International in India (Continued)
Appointing Authority Need not be specified since the Act has a provision
for Supreme Court of India to act as Appointing
Authority.
Qualification of
Arbitrators
If some technical knowledge is required, it is
advisable to specify.
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Language English unless both parties are comfortable with some
other language.
Appeal Not recommended
Costs During the proceedings each party bears its own.
Cost Allocation – By the Arbitration Panel in award.
B4. International Outside India
� Arbitration law should be of the country where arbitration is proposed to be held.
Law governing
Agreement
One of the six options given in the previous chapter
about international arbitration in India.
Law for arbitration Arbitration law of the seat of arbitration to apply. Part I
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Law for arbitration Arbitration law of the seat of arbitration to apply. Part I
of Arbitration and Conciliation Act, 1996 will NOT
apply.
Curial Law UNCITRAL Rules / ICSID Rules are two common
options.
Place of arbitration Specify the place outside India.
Number of Arbitrators Three is almost the norm.
B4. International outside India (Continued)
Appointment of Arbitrator Each party to appoint one arbitrator. The two arbitrators to
select the Presiding Arbitrator.
Appointing Authority May be left to the Curial Law.
Qualification of Arbitrators If some technical knowledge is required, it is advisable to
specify.
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specify.
Language English unless both parties are comfortable with some other
language.
Appeal Not recommended
Costs During the proceedings each party bears its own.
Cost Allocation – By the Arbitration Panel in award.
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www.indialegalhelp.com
September 2019
Anil Chawla Law Associates LLP is registered with limited liability and bears LLPIN AAA-8450.
This Presentation is an academic exercise. It does not offer any advice or suggestion to any individual or firm or company. While all efforts have been made to ensure accuracy and correctness of information provided, no warranties / assurances are provided or implied. Readers are advised to consult a Legal Professional / Company Secretary / Chartered Accountant before taking any business decisions. Anil Chawla Law Associates LLP does not accept any liability, either direct or indirect, with regard to any damages / consequences / results arising due to use of the information contained in this Presentation.