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India as a Hub for International Commercial Arbitration:

An Overview In Reference to the Amendments in Indian
Arbitration Law

Article · November 2016

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 LIMITATIONS ON JUDICIAL ANALYSIS IN
PROSECUTION OF CIVIL SERVANTS IN INDIA

India as a hub for

International Commercial
Arbitration: An overview in
reference to the
Amendments in Indian
Arbitration Law

Rajesh Bahuguna* &

Vijay Srivastava**

Abstract
The amendment to the Arbitration and Conciliation Act, 1996 brings much required changes and
was intended at transforming the arbitration system in India. Some major changes will have a
noteworthy effect on the way of arbitrations which are conducted in India and will also bring a
positive signal for India's reputation as a hub for International Commercial Arbitration (ICA). Even
after major alteration the certain areas of Indian arbitration are still doubtful and need explanation.
In this paper the authors mainly examine some major areas of concern viz. some opinions of stake
holders of International Commercial Arbitration as well as the Indian Government’s efforts for
making India as a hub for ICA in the light of Foreign Direct Investment (FDI) policies. It may be noted
that applicability of law and principles of lex arbitri under ICA and recourse against foreign award in
India have also been discussed with the help of leading cases. The article also highlights the
lacunas of ICA and prescribes some remarkable suggestions for improvement for making India as a
hub for International Commercial Arbitration.

Key words
International Commercial Arbitration (ICA), Cross Border Commercial Issues, Foreign Direct
Investment (FDI) and lex arbitri.

I. INTRODUCTION
The global trading community, has shown deep distrust due to the excessive judicial
supervision even in the context of foreign arbitrations, has set alarm bells ringing in the
government and judiciary. The International business community all across the globe
has accepted international commercial arbitration1 as an effective mechanism for
resolving its commercial disputes. reluctance of parties to have matters decided by the
national court of the other disputing party, with perhaps unknown law, language and
culture, is treated as one of the major reasons for this preference. The history of
arbitration as an informal mechanism of dispute settlement in the Asian continent can

* Ph.D., Professor, Principal & Dean, Law College Dehradun, Uttaranchal University, Dehradun, Uttarakhand.
**Research Scholar, Law College Dehradun, Uttaranchal University, Dehradun, Uttarakhand.
1
The terms 'International Arbitration' and 'International Commercial Arbitration' are used as 'ICA'
interchangeably. 55
 8(1) DLR (2016)

be long back to ancient times.2 The political and economic conditions that existed in
various countries in the continent created major uncertain blocks for the growth of
commerce and trade until the beginning of the 20th century.
The region has also clear aggression towards cross- border arbitration for the settlement
of international commercial disputes. Asian countries felt, their concern especially for
ICA, first time ever; Many countries in the region increased a noteworthy economic
impetus after the Second World War and experienced an remarkable record of growth in
the last few decades.
Over the past few years, the world trade communities has spectator an increasing
number of cross-border disputes, especially investments; along with a simultaneous rise
in international disputes. The commercial parties support ICA for the settlements of
such disputes. There is a major doubt that the choice of arbitral seat is control inter alia
by the arbitral set up and the intervention of judiciary in the place of arbitration. Asian
countries have responded to these demands through effective development of their
strong mechanism for ICA, together with noteworthy initiatives to bring up to date their
domestic arbitration laws. Following this pitch in ICA, there has also been a lot of
increase in the conflict of laws especially in legal systems of various countries, for
example: India, Hong Kong, Singapore, Malaysia, Dubai etc.
Amendments to the Arbitration and Conciliation Act, 1996, have been very long awaited
changes in arbitral world especially for ICA in India. It is much expected from The
Arbitration and Conciliation Act, 1996, (Amendment) Act, that it will prove as effective
tool for ICA. The Amendment is intended at bringing about a constructive change in the
arbitration law by preventing ambiguity and irregularity in India's arbitration law. It is
hoped that it will promote the use of arbitration in India, as well as promote India as a
venue for international arbitration. However, despite the legislative intervention, the
Amendment may not be able to resolve certain issues.
The Indian legislature introduced the Arbitration and Conciliation Act, 1996 as it was
realized that the then existing arbitration law had become obsolete.3 The authors
discuss some issues, where judicial involvement is further necessary to determine the
inconsistency and uncertainty that have mushroomed under arbitration law. The
ambiguity adjoining the law leading the arbitration agreement in ICA is a major
discussed issue in this paper. Along with this issue the problems relating, whether two
Indian parties can select a foreign seated arbitration, and hence prohibit the Part I of the
Arbitration and Conciliation Act, 1996.4

2
Simon Greenberg, et al., International Commercial Arbitration: An Asia Pacific Perspective, (2011). for example,
arbitration in china can be traced back to about 2100 – 1600 BC.
3
Prior to the enactment of the Act, the arbitration regime in India was governed by multiple legislations, which
were often criticized for the extensive judicial intervention permitted there under. Domestic arbitrations were
governed by the Arbitration Act, 1940 and recognition and enforcement of foreign awards was provided for
under two separate legislations, the Arbitration (Protocol and Convention) Act, 1937 (for awards under the
1927 Geneva Convention) and the Foreign Awards (Recognition and Enforcement) Act, 1961 (for awards under
the 1958 New York Convention).
4
Arbitration and Conciliation Act, no. 26 of 1996 (India), § 2(2) [Part I] shall apply where the place of arbitration
56 is in India.
 India as a hub for International Commercial Arbitration: An overview in
reference to the Amendments in Indian Arbitration Law

The prime objective of reform in Indian arbitration law to make it effective and
responsive in terms of Economic reforms and it may completely successful if its dispute
resolution provisions are in harmony with the international commercial administration.
Part I of the Arbitration and Conciliation Act 1996, which governs Domestic arbitrations,
is drafted on the basis of guidelines of UNCITRAL Model Law on International
Commercial Arbitration, 1985. Under the Act, arbitration emerged as a frequently used
method of alternate dispute resolution. However, it has become synonymous with high
costs and delays, plagued by the same ills as litigation, which it had intended to replace.
As a consequence, foreign investors and corporate hoses which are doing business in
India became anxious of the risks correlated with arbitration proceedings in India. Once
again, the Government of India identifies the critical requirement to amend the Indian
arbitration law. After two unsuccessful attempts to motivate alteration in 20015 and
20046 the Law Commission of India token up an initiatives to amend the Act in 2010 and
submitted its report by August 2014.7 These recommendations were recognize by the
Parliament and received presidential assent on December 31, 2015.8
The Amendment has convey the extensive alteration to the arbitration set up in India,
and has deal with various concerns concerning postponement and unnecessary
interference by the courts. Most of the changes comprise the availability of interim relief
in case of ICA located outside India, which will protect foreign parties by securing the
assets of the Indian party, if necessary9 The definition of Court' for ICA is now
specifically mean the High Court.10 The Amendment also incorporates provisions of the
IBA Guidelines on Conflicts of Interests in ICA, which establish impartiality of
arbitrators and guarantee autonomy and neutrality of arbitrators, introducing
intelligibility in the whole arbitral process.11 The explanation of public policy' has been
justified and further bound in case of ICA , to help courts while shaping a challenge to a
domestic award or enforcement of a foreign award.12 The Act now permits arbitrators to
award penalty based on whether, inter alia, the party made a frolicsome counter claim or
that it decline any sensible offer to resolve the dispute.13 These changes will have a
noteworthy impact on the way arbitrations are conducted in India for ICA and it is
expected that the Amendment will fetch a optimistic change to the method India is
professed as a seat for ICA.

5
Law Commission of India, Report no. 176 - the Arbitration and Conciliation (Amendment) Bill, 2001 (2001),
available at: http://lawcommissionofindia.nic.in/arb.pdf
6
Ministry of Law and Justice, Justice Saraf Committee Report on Implications of the recommendations of the
Law Commission's 176th Report and Amendment Bill of 2003 (2005).
7
Law Commission of India, Report no. 246 – amendments to the Arbitration and Conciliation Act, 1996, 25
(2014), available at: http://lawcommissionofindia.nic.in/reports/report246.pdf
8
Arbitration and Conciliation (Amendment) Act, no. 3 of 2015 (India).
9
Arbitration and Conciliation Act, no. 26 of 1996, § 2(2).
10
Id. § 2(1)(e)(ii).
11
This is provided in Section 12, read with fifth schedule and seventh schedule, Arbitration and Conciliation Act,
1996.
12
The Arbitration and Conciliation Act, no. 26 of 1996, §34, §48.
13
Id. § 31a (3). 57
 8(1) DLR (2016)

II. CONFLICTING ISSUES IN INTERNATIONAL COMMERCIAL

ARBITRATION:
The proper law of the arbitration
'Lex Arbitri' has been most significant issue in whole arbitration process in India ,
especially in ICA. It refers the law applied in the arbitration agreement, which is one of
the areas which is vague and required imperative justifications. It also focuses on the
applied law of the arbitration agreement' or ‘lex arbitri’14 in ICA. Which is also known as
the conflict of laws rules applicable to select each of the foregoing laws.15 It is largely
agreed that there are broadly three sets of laws which apply to arbitration:16
The principle of party autonomy allows parties to choose different laws, for all the above,
in their contracts. preferably an arbitration clause would recognize all three kinds of law,
however, parties often fail to specify the lex arbitri send-off it to the courts to determine
what the parties intended to be the proper law of the arbitration agreement.
There is no clear cut definition which determines the matters covered under the lex
arbitri. A distinction has to be drawn between substantive matters relating to the
arbitration agreement, which are governed by the law of the arbitration agreement and,
procedural matters relating to a reference, which are governed by the curial law i.e. law
governing the conduct of the arbitration. Where the parties have not expressly chosen
the lex arbitri in their dispute resolution clause, it falls on the courts to decide what the
parties intended. The Supreme Court of India in National Thermal Power Corporation v.
Singer Company and Others [NTPC], held that the proper law of the arbitration
agreement is normally the same as the proper law of the contract. It is only in exceptional
cases that it is not so even where the proper law of the contract is expressly chosen by the
parties. Where, however, there is no express choice of the law governing the contract as a
whole, or the arbitration agreement as such, a presumption may arise that the law of the
country where the arbitration is agreed to be held is the proper law of the arbitration
agreement. But this is only a rebuttable presumption.17In Sumitomo Heavy Industries
Ltd. v. ONGC Ltd. and Ors. [Sumitomo], the Supreme Court upheld an early decision of
an English court holding that the proper law of the contract was decisive of the lex
arbitri.18

14
It is noteworthy that the term lex arbitri is used differently by different authors. for eg. Russell uses lex arbitri
while referring to the curial law; even the Indian Supreme Court uses it in different ways- in Enercon (India) Ltd.
and ors.v. Enercon Gmbh and anr., (2014) 5 S.C.C. 1 (India), lex arbitri is used to describe the procedural law
governing arbitration, whereas in Reliance Industries v. Union of India, (2014) 7 S.C.C. 603 (India), it is used to
describe the proper law of the arbitration agreement. In this article, we have used lex arbitri to identify the
proper law of the arbitration agreement.
15
G. Born, International Commercial Arbitration, pp. 409-561, 1310-47, 2105-2248 (2009).
16
Lord Mustill and Stewart Boyd, Applicable Law and Jurisdiction of Courts in Commercial Arbitration, (2nd ed.
1989); Sumitomo Heavy Industries Ltd. v. ONGC Ltd. and others, (1998) 1 S.C.C. 305 (India); Reliance Industries
Limited v. Union of India, (2014) 7 S.C.C. 603 (India).
17
16 (1992) 3 S.C.C.551, 21 (India).
18
(1998) 1 S.C.C. 305 (India) (though this case reached the same decision as in NTPC, the court here did not refer
to or discuss its own decision in NTPC).
58
 India as a hub for International Commercial Arbitration: An overview in
reference to the Amendments in Indian Arbitration Law

The decisions of the Supreme Court in NTPC/Sumitomo are contrary to the stand taken
by most English courts on international arbitration, which say that in the absence of an
express choice by the parties, the lex arbitri will be held to be the law of the country in
which the arbitration is held, i.e., seat of arbitration.19 This line of reasoning is supported
by the Convention on the Recognition and Enforcement of Awards, 1958 the New York
Convention. Therefore, the New York Convention envisaged that where the parties had
not agreed to the lex arbitri, the proper law of the arbitration agreement would be the law
of the seat of the arbitration.
A similar approach was taken by the Bombay High Court in HSBC PI Holdings
(Mauritius) Limited v. Avitel Post Studioz Limited [HSBC],20where the court held that the
agreement to arbitrate at Singapore; has a closer and real connection‖ with the seat
chosen by the parties, i.e. Singapore. Therefore, arbitration agreement would be
governed by the law of Singapore. Therefore, even though the proper law of the contract
was expressly chosen by the parties in HSBC to be Indian law, the Court chose to decide
the lex arbitri based on the seat of arbitration rather than the proper law of the
contract.These decisions of the Calcutta and Bombay High Courts try and carve out
exceptions to the NTPC principle, but there is still uncertainty in recognizing the lex
arbitri when the seat as well as the substantive law have been identified by the parties.
Thus it may establish a problem in an ICA where, for example, the substantive law of
the contract is Indian law, but the arbitration is managed by institutional rules and the
seat is outside country . In such a condition, an international tribunal consisting of
arbitrators from England and other jurisdictions with similar rules, would believe the law
of the seat to be the lex arbitri. The Indian party may resist the enforcement of an award
from such a tribunal on the grounds that the tribunal applied the wrong law and this is
against the public policy of India.
Problems in choosing Seat for arbitration outside India
In Indian arbitration law a most debating and arguing issue under ICA is , whether two
Indian parties can prefer a foreign seat and keep out the provisions of Part I of the Act or
not . No doubt it is very rare to have a situation where the Indian subsidiary of a foreign
entity has entered into an arbitration agreement with another Indian party providing for
a foreign seat. Would such arbitration be considered a domestic arbitration or an
international commercial arbitration? Part I of the Act provides that it will only be
applicable where the place of arbitration is India, therefore an arbitration seated abroad
between two Indian parties would not be a domestic arbitration under Part I of the Act.21
Section 2(f) of the Act defines ICA 'as arbitration relating to disputes that arise out of a
legal relationship where one of the parties is not Indian.22 Therefore, arbitration between

19
Sulamerica v. Enesa, [2012] EWCA (Civ.) 638 (U.K.); Naviera Amazonica Naviera Amazonica Peruana S.A. v.
Compania Internacional Compania Internacional De Seguros Del Peru, (1988) 1 Lloyd's Rep. 116 (ca) (U.S.).
20
Arb. p. 1062 of 2012 Jan. 22 2014 (Bombay High Court) (India) this judgment has been challenged in the
Supreme Court of India.
21
Arbitration and Conciliation Act, no. 26 of 1996. §2(2).
22
Section 2(f), Arbitration and Conciliation Act, 1996 provides that- International Commercial Arbitration
means an arbitration relating to disputes arising out of legal relationships, whether contractual or not,
considered as commercial under the law in force in India and where at least one of the parties is (i) an individual 59
 8(1) DLR (2016)

two Indian parties, seated outside India would not be considered an international
commercial arbitration under the provisions of the Act. The Hon'ble Supreme Court of
India has constantly declare that Part I of the Act does not apply to ICA seated outside
India and if parties choose a foreign seat of arbitration and a foreign law as their law of
arbitration, then the intention is to exclude Part I of the Act.23 This has been unbreakable
by the Amendment, whereby barring Sections 9, 27 and 37, Part I has specifically been
made inappropriate to ICA seated outside India.24 An award which results from such an
arbitration will be considered a foreign award'under Part II of the Act.25 Applicability of
Part II is exclusively based on the seat of arbitration and whether the seat is located in a
country which is a signatory to the New York Convention and been recommended by
the Central Government in the Official Gazette. Once this standard is fulfilled, Part II
would relate and the foreign award'from such an arbitration would be familiar and
enforced in India.
The Act does not envision a condition where two Indian parties can decide a seat for
their arbitration outside India. This irregularity could have been taking away by the
Amendment by expansion the definition of ICA, to include arbitration seated abroad.
The Indian judiciary has been focused with this quandary for some time and has been
incapable to give a clear reply. This issue brought before the Hon'ble Supreme Court of
India in Atlas Exports Industries v. Kotak and Company.26 The argument raised was that
the contract was complementary to public policy as it unreservedly barred the remedy
available under Indian law and bound two Indian parties to have their disputes
arbitrated by foreign arbitrators. Section 28 of the Indian Contract Act, 1872 provides
that agreements in restraint of legal proceedings are void; The court went onto hold that,
merely because the arbitrators are situated in a foreign country cannot by itself be
enough to nullify the arbitration agreement when the parties have with their eyes open
willingly entered into the agreement'.27 Thus, the arbitral award arising out of a foreign-
seated arbitration stuck between Indian parties was held to be not inoperative or
opposed to public policy. Section 28 of the Act provides for the rules on which the
Tribunal would decide a matter, if the arbitration is seated in India. 28 The Court added a

who is a national of, or habitually resident in, a country other than India; or (ii) a body corporate which is
incorporated in any country other than India; or (iii) an association or a body of individuals whose central
management and control is exercised in any country other than India; or (iv) the government of a foreign
country.
23
Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc., (2012) 9 S.C.C. 552 (India); Videocon
Industries Ltd. v. Union of India and anr., (2011) 6 S.C.C. 161 (India).
24
This is based on the proviso to section 2(2) of the Arbitration and Conciliation Act, 1996, added by the
amendment.
25
Section 44, of the arbitration and conciliation act, 1996 unless the context otherwise requires, -foreign award
means an arbitral award on difference between person arising out of legal relationships, whether contractual
or not, considered as commercial under the law in force in India, […] (a) in pursuance of an agreement in writing
for arbitration to which the convention set forth in the first schedule applies, and (b) in one of such territories as
the central government, being satisfied that reciprocal provisions have been made may, by notification in the
official gazette, declare to be territories to which the said convention applies.
26
(1999) 7 S.C.C. 61 (India).
27
ATLAS Exports, (1999) 7 S.C.C. 61
28
60 Section 28, Arbitration and Conciliation Act, 1996 provides as follows- rules applicable to substance of
 India as a hub for International Commercial Arbitration: An overview in
reference to the Amendments in Indian Arbitration Law

corrigendum in TDM to the effect that, any findings/observations made hereinbefore

were only for the purpose of determining the jurisdiction of this Court as envisaged under
Section 11 of the 1996 Act and not for any other purpose. The Court followed the decision
in Atlas Exports and allowable the Indian parties to arbitrate outside India, and held that
if the seat is in a country which is a signatory to the New York Convention, then Part II of
the Act would be appropriate. The agreement cannot be held to be null and void because
the parties had chosen for a foreign-seated arbitration. The High Court further held that
where two Indian parties had freely entered into an agreement in relation to arbitration,
the argument that a foreign-seated arbitration would be opposed to public policy was
untenable. The court logically explained, that where parties, by joint agreement, had
decided to resolve their dispute by arbitration and chosen a seat of arbitration outside
India then in view of the provisions of section 2(2) read with Section 44 of the Act, Part II
of the Act would govern the proceeding rather than Part I. The High Court of Bombay in
M/s. Addhar Mercantile Private Limited v. Shree Jagdamba Agrico Exports Pvt. Ltd. has
taken conflicting opinions on the same issue.29 30 The argument that two Indian parties
choosing a foreign seat is contrary to Section 28 of the Act is indefensible, as Section 28
becomes applicable only when the arbitration is seated in India. The question is not
whether two Indian parties may choose a foreign law as their substantive law, but
whether they can prefer a seat of arbitration outside India and whether this choice would
not be against the public policy of India.
In view of these changes in the institutional rules, the Law Commission in its report had
suggested an amendment to the Act to give statutory recognition to the concept of
emergency arbitrators.31 This amendment was planned to be introduced in Part I of the
Act, which defines arbitral tribunal to be a sole arbitrator or a panel of arbitrators.32 The
arbitral tribunal would be as appointed according to the procedure agreed between the
parties or under Part I, if the parties are unable to appoint the tribunal.33 The change that
the Law Commission sought to bring about was to broaden the definition of arbitral
tribunal' to include an emergency arbitrator appointed under any institutional rules. In
the present scenario, in an arbitration seated in India, conducted under the institutional
rules, which allow parties to ask for appointment for emergency arbitrators, the decision
of an emergency arbitrator will not be enforceable, as emergency arbitrators are not

dispute – (1)where the place of arbitration is situate in India – (a) in an arbitration other than an international
commercial arbitration, the arbitral tribunal shall decide the dispute submitted to arbitration in accordance
with the substantive law for the time being in force in India; (b) in international commercial arbitration, - (i) the
arbitral tribunal shall decide the dispute in accordance with the rules of law designated by the parties as
applicable to the substance of the dispute.
29
Arb. app. no. 197 of 2014 and Arb. pet. 910 of 2013jun.12, 2015 (Bombay High Court) (India).
30
2014 (4) arb. l.r. 273 (Delhi).
31
Law Commission of India, report no. 246 – amendments to the Arbitration and Conciliation Act, 1996 37
(2014), available at: http://lawcommissionofindia.nic.in/reports/report246.pdf
32
Arbitration and Conciliation Act, no. 26 of 1996, § 2(1)(d).
33
Arbitration and Conciliation Act, no. 26 of 1996, § 11.
34
In the case of an ad-hoc arbitration, Indian Arbitration Act does not include any provision for appointment of
an emergency arbitrator. Therefore, such a situation can only arise if the arbitration is conducted under
institutional rules. 61
 8(1) DLR (2016)

familiar under the Act.34 In case of ICA seated outside India, the question is whether the
decision of the emergency arbitrator qualifies as a foreign award to be enforceable under
Part II of the Act.
The term arbitral 'award' is described in the New York Convention as not only awards
made by arbitrators appointed for each case but also made by permanent arbitral bodies
to which parties have submitted.35 Even though this definition of an award is unclear, the
opinion amongst experts of ICA is that the New York Convention only envisages
enforcement of final awards.36 Therefore, it will be very difficult to enforce the decisions
of emergency arbitrators in India even under Part II of the Act. One way to conquer this
obstacle of unenforceability would be set up further changes to incorporate specific
provisions for the enforcement of an award passed by an emergency arbitrators. In Hong
Kong, a specific provision has been introduced in their arbitration ordinance for the
enforcement of reliefs granted by an emergency arbitrator.37 As explained above, the
Law Commission had intended to do something similar, which unluckily, did not see the
light of the day. Parties in India have had to find an answer to fill the slit created by the
lack of emergency interim relief. The High Court of Bombay was faced with a situation
where an emergency arbitrator appointed under SIAC Rules, had granted emergency
relief, which the respondent failed to comply with.38 Since this decision was not
enforceable per say in the Indian courts, the claimant for relief under Section 9 of the Act
for grant of interim relief pending the constitution of the tribunal.
This, however, is not a feasible method of enforcing the decisions of an emergency
arbitrator as it increases the load upon the courts and upon the parties. Therefore, it
would be advisable to make suitable amendments in the Act to remove this loophole.

Statistical Status and Government's Efforts towards Making India as an

International Hub for International Commercial Arbitration
With the speedy growth in international commercial activities, cross border issues
became more inevitable challenge before world communities. Especially in India it has
been experienced that cross border commercial disputes are mushroomed since last few
years rapidly. Even after major amendments in arbitration law in India especially for the
settlement of International disputes, there are still so many challenging issues which
are untouched and unsolved. For the purpose of making more and more effective
International commercial arbitration mechanisms in India and converting India as a
hub for International commercial arbitration for world trade communities a personal
survey has been done by the author for discussing the special features, factors and

35
Article i(2), New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958,
June 10, 1958,
36
Jean-Paul Beraudo, recognition and enforcement of interim measures of protection ordered by arbitral
tribunals, 22 j. international arb. 245, (2005); see also David A.R. Williams QC, Interim Measures, 225, the asian
leading arbitrators' guide to international arbitration 244, (2007) (the prevailing view is that such orders are not
enforceable as award under the New York Convention).
37
Hong Kong Arbitration (Amendment) Bill, (2013) cap. 609, § 22b (Hong Kong).
38
Avitel Post Studioz Limited and Others v. HSBCPI Holdings (Mauritius) Limited Arb. p. 1062 of 2012 Jan. 22,
2014(Bombay High Court) (India); Sumitomo Heavy Industries Ltd. v. ONGC Ltd. and Others, (1998) 1 S.C.C.
62 305(India).
 India as a hub for International Commercial Arbitration: An overview in
reference to the Amendments in Indian Arbitration Law

III. SPECIAL FEATURES OF INTERNATIONAL COMMERCIAL

ARBITRATION
The recognition of arbitration may be justified by coding the special features of
International Arbitration which considered as unique features of resolution of cross
border disputes. In general predictably, features of arbitral procedure like enforceability
and resolution without specific legal systems/national courts were most commonly
preferred features for choosing arbitration as a mode for resolution of disputes ,
subsequently flexibility, selection procedures relating to arbitrators, other conventional
aspect to international commercial arbitration, such as “finality” and “neutrality”, were
less preferred.

Special Features of International Arbitration

65%

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International Commercial Arbitration as Most Preferred Mechanism for

Cross - Border Bisputes
Under a wider field observation respondents showed an effective preference for
international commercial arbitration over other options such as cross-border litigation or
arbitration. Almost ninety percent of respondents said that international commercial
arbitration is their preferred dispute resolution mechanism, either through
Independently International commercial arbitration which is approx 65% and together
with other mechanisms of alternative dispute mechanisms which is approx 25%.

63
 8(1) DLR (2016)

Preferred Mechanisms for Cross-Border Issues

3% 2%
5%
International commercial arbitration 65 %

ICA with other alternative of dispute resoultion 25%

25% Medition as mechanism for dispure resolution 5%

Litigation with ADR 3%

65%
Core litigation 2%

Factors for Selecting Seats for Arbitration under ICA

Under a opinion based survey for examine the factors for choosing particular seat for
International commercial arbitration, it has been observed that the factors involves in
giving preference to them. Most of the Respondents were in opinion that the reputation
and recognitions of the arbitral seats are the major factors in selection of arbitral seats
under ICA along with the said factors, law applicable to the particular dispute, corporate
policy of the country, personal connections, counter party effects, recommendations are
the factors, which effects the selection procedure of seat for arbitration under ICA.

Factors Involve in Selection of Arbitration

under ICA
Other factors
18%
Reputation and
Recognition of seat
34%

Corporate policies
22%

Law applicable
26%

Reasons for Choosing a Particular Seats of Arbitration under ICA

The reason for selecting a particular seats of arbitration under ICA, were also an centre
for discussion under whole research project. In the light of amendments in Indian
arbitration law in 2016 and on the basis of certain recommendation of Law commission
report of 246th and 260th, which is an remarkable effort to make India as a place/ hub for
International Commercial Arbitration (ICA), the three dominant factors relates to the
'formal legal infrastructure' of a seat for arbitration under ICA are : (I) Neutrality and
impartiality of the local legal system of country; (II) National arbitration law; and (III)
Past record for enforcing agreements to arbitrate and arbitral awards. Along with the
above factors which attracts the respondents in selection of a seat for arbitration, of
particular country are availability and efficiency of arbitrator, cultural familiarity,
location of seat are as intrinsic legal features of an arbitration seat and were arguably
justified by most of the respondents as the attractive and intrinsic features of seat for
arbitration under ICA.
64
 India as a hub for International Commercial Arbitration: An overview in
reference to the Amendments in Indian Arbitration Law

Reasons for Choosing a Particular Seat for

Arbitration under ICA

location of seat
Neutrality and impartiality of the
15%
local system of country 22%

cultural
familiarity,
14%

National
arbitration law
18%

availability and
efficiency of Past record for enforcing
arbitrator agreements to arbitrate and
17% arbitral awards 14%

IV. INDIAN GOVERNMENTS EFFORTS FOR MAKING INDIA AS A HUB

FOR INTERNATIONAL COMMERCIAL ARBITRATION
The Government of India's transformed focus to make India as the Global hub for
International Commercial Arbitration for the settlement of cross border commercial
issues.. Focusing the government's persistent assurance to provide a friendly the cross-
border business environment, a three-day global arbitration conference was organized
recently in Delhi by the government think tank NITI Aayog at the helm of affairs. Under
this Global Conference a national initiative has been taken to make stronger arbitration
law and its enforcement in India specially for cross border disputes.
The Judges of the Supreme Court of India, top government officials, luminaries, legal
experts and corporate heads took part in the panel discussions. The interactive sessions
focused on all processes involved in creating a robust and cost effective arbitration
ecosystem.
Under the auspicious presence of Prime Minister of India a number of enlighten views
has been discussed by the legal lumaniries. According to the Prime Minister, Mr.
Narendra Modi, "A robust legal system with a vibrant arbitration culture is essential for
businesses to grow and "the creation of a vibrant eco-system for institutional arbitration
is one of the foremost priorities of this government." The Chief Justice of India, Justice
T.S. Thakur endorse the views on the need to move forward Alternative Dispute
Resolution (ADR), remarked that "The avalanche of cases constantly puts the judiciary
under great stress" and articulated his concerns over the unnecessary judicial
involvement in arbitral awards.
In order to attain the objectives of making India a regional hub and global hub for
domestic and international arbitration, the conference tinted the need to develop world 65
 8(1) DLR (2016)

class arbitral infrastructure in India. Senior advocate Dr. Abhishek Manu Singhvi said,
"The Mantra of making arbitration more effective and popular can be achieved by
getting the 'A, B, C, D of Arbitration right i.e., (Universal) Access, (Reducing) Backlog,
(Lowering) Cost and (Removing) Delay,". He also acknowledged that one of the reasons
of arbitration not receiving the full focus, is the excessive judicial supervision and
intervention in the arbitral proceedings.
The requirement for expert arbitrators working at the plebs was highlighted by Justice R
C Lahoti who advocated for the best human resource and physical infrastructure to
provide the ideal atmosphere for qualitative arbitration in India. He also focused the lack
of transparency in appointment of arbitrators especially by the Courts is also a major
problems for ineffective arbitration mechanisms in India.
Judges of the Supreme Court of India, including Justice A.K Sikri, Justice D.Y
Chandrachud, former judge, Justice R.V Raveendran together highlighted the role of
court sustain in discomforting widespread challenge to stand arbitration at various
stages. They also emphasizes on the need for a coordination that courts must attain with
respect to their participation in the arbitral process.
Although the practice of arbitration is far from unfamiliar to India, the conference played
a vital role in meeting competency of the best practices in arbitration and the way ahead
from the world-class arbitration institutions such as ICC, SIAC, LCIA, KLRCA, HKIAC
and PCA.
In an effort to contribute an all-around standpoint in constructing an effective
arbitration policy, the conference brought together members of the user community also
who have been in the suffer of high level disputes such as BALCO, Airtel, J.K Tyres,
IndiGo Airlines, NHAI, BHEL and FICCI.

V. CONCLUSION
No doubt requirements Arbitration trend and practice in India is changing with the
growth of international trade and its. From the above analysis, it is clear that there still
there are some ambiguities in Indian arbitration law, which require judicial explanation
and practically which need some major changes to solve the cross border issues through
the arbitration. It is much expected from The Arbitration and Conciliation Act, 1996,(
Amendment ) Act, that it will prove as effective tool for ICA. The Amendment is intended
at bringing about a constructive change in the arbitration law by preventing ambiguity
and irregularity in India's arbitration law. It is hoped that it will promote the use of
arbitration in India, as well as promote India as a venue for international arbitration.
Indeed the legislative efforts to amend the Arbitration and Conciliation Act, which no
doubt inactive the loopholes in the country's arbitration law, especially in ICA, goes a
long way in scatching India as an arbitration friendly jurisdiction as a hub for
International Commercial Arbitration.

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