International Commercial Arbitration System

Arbitration is a procedure in which a dispute is submitted, by agreement of the parties,
to one or more arbitrators who make a binding decision on the dispute. In choosing
arbitration, the parties opt for a private dispute resolution procedure instead of going to
court.
Its principal characteristics are:
 Arbitration is consensual
Arbitration can only take place if both parties have agreed to it. In the case of future
disputes arising under a contract, the parties insert an arbitration clause in the relevant
contract. An existing dispute can be referred to arbitration by means of a submission
agreement between the parties. In contrast to mediation, a party cannot unilaterally
withdraw from arbitration.
 The parties choose the arbitrator(s)
Under the WIPO Arbitration Rules, the parties can select a sole arbitrator together. If
they choose to have a three-member arbitral tribunal, each party appoints one of the
arbitrators; those two persons then agree on the presiding arbitrator. Alternatively, the
Center can suggest potential arbitrators with relevant expertise or directly appoint
members of the arbitral tribunal. The Center maintains an extensive roster
of arbitrators ranging from seasoned dispute-resolution generalists to highly specialized
practitioners and experts covering the entire legal and technical spectrum of intellectual
property.
 Arbitration is neutral
In addition to their selection of neutrals of appropriate nationality, parties are able to
choose such important elements as the applicable law, language and venue of the
arbitration. This allows them to ensure that no party enjoys a home court advantage.
 Arbitration is a confidential procedure

The WIPO Rules specifically protect the confidentiality of the existence of the
arbitration, any disclosures made during that procedure, and the award. In certain
circumstances, the WIPO Rules allow a party to restrict access to trade secrets or other
confidential information that is submitted to the arbitral tribunal or to a confidentiality
advisor to the tribunal.
 The decision of the arbitral tribunal is final and easy to enforce
Under the WIPO Rules, the parties agree to carry out the decision of the arbitral tribunal
without delay. International awards are enforced by national courts under the New York
Convention, which permits them to be set aside only in very limited circumstances.
More than 165 States are party to this Convention
International Commercial Arbitration system

International commercial arbitration helps to resolve disputes among the
international parties arising out of the internal commercial agreements. Section
2(1)(f) of the Arbitration and Conciliation Act defines international commercial
arbitration as disputes arising out of the legal relationship where one of the
parties is a citizen, resident, or habitually residing out of India. International
commercial arbitration is used by the traders of different countries as a way of
settling their business conflicts.
The procedure to apply for international commercial arbitration is the same as

domestic arbitration. The scope of Section 2(1)(f) of the Arbitration and
Conciliation Act was determined by the Supreme Court in the case of TDM
Infrastructure Pvt. Ltd. v. UE Development India Pvt. Ltd . In this case it was
held that if the company has dual nationality, that means it is registered in
foreign and in India then that company for this Act would be regarded as Indian
corporation and not the foreign corporation. International arbitration just like
domestic arbitration takes place involving a third party known as an arbitrator.
International commercial arbitration allows the parties to resolve their disputes
amicably by maintaining their relationship and with less money by respecting
each other’s cultural and linguistic background. International arbitration is also
known as a ‘hybrid form of international dispute resolution’ because
international arbitration allows mixing two legal provisions the Code Civil Law
Procedure, 1908, and the Common Law Procedure. Parties coming together to
work often in their legal contract mentions the clause of the arbitration
agreement to resolve the disputes without going to court.
The International Chamber of Commerce (ICC) model arbitration clause, for

instance, merely reads: “All disputes arising out of or in connection with the
present contract shall be finally settled under the rules of arbitration of the
International Chamber of Commerce by one or more arbitrators appointed by
the said rules.”
Steps involved in International Commercial
Arbitration
There are various steps involved while conducting the proceedings of the
international commercial arbitration. The steps are explained below.
 Notice of arbitration
To commence the proceedings of arbitration one party has to provide the notice
of arbitration to the other party requesting to refer the dispute to arbitration.
When the respondent receives the notice of arbitration, the proceedings of
arbitrations begin. In this notice, there are two essentials: one is the
communication of an intention to refer the dispute to arbitration and the other
is that the other party to whom the notice has been served should take a step
towards it.
 Referral to arbitration
The judicial authority can refer the subject matters of the case to the arbitration
if that agreement contains the clause of arbitration to settle the disputes among
the party if there are any. According to Section 8 of the Arbitration and
Conciliation Act, the judicial authority can refer the parties to arbitration if there
is an arbitration agreement.
 Appointment of arbitrators
The parties are at their discretion to appoint the arbitrator to decide their case.
If the parties are not able to appoint the arbitrators mutually due to some
issues then the court allows the parties to appoint each arbitrator and then
these two arbitrators will appoint the third party who will be neutral. If the
parties fail to appoint the arbitrators within thirty days or the two arbitrators fail
to appoint the third arbitrator then the parties can request the Supreme Court
and High Court to appoint the arbitrators. The High Court or the Supreme Court
can appoint any person or institution to appoint arbitrators. In the cases of
International Commercial Arbitration, the Supreme Court can appoint the
arbitrators for the parties and in the cases of domestic arbitrations, the High
Court appoints the arbitrators.
 The challenge to the appointment of arbitrators

The appointment of arbitrators can be challenged only on these two criteria:
1. When there are circumstances that raise reasonable suspicions about

his or her independence or impartiality; or
2. The arbitrator does not possess the qualities the parties required.
 Interim relief
The Arbitration and Conciliation Act, in Section 9 provides for interim measures
of protection not just before the commencement of arbitral proceedings and
during the arbitral proceedings but also after the arbitral award has been
delivered. Section 17 provides for interim measures ordered by the arbitral
tribunal if it is found at the time of proceedings that the disputed matter is
dangerous then it can ask the party to provide security.
 The mandate of the arbitrator

If arbitrators do not deliver the arbitral award on time then the mandate of the
arbitrators expires this was held in the case of NBCC Ltd. v. J.G. Engineering
Pvt. Ltd by the Supreme Court. The mandate of the arbitrators expires
according to the period agreed by the parties.
 Challenge to jurisdiction
The Supreme Court in the case of S.B.P. and Co. v. Patel Engineering Ltd. and
Anr held that if without judicial intervention the arbitral tribunal was constituted
by the parties the arbitral tribunal can determine all jurisdictional issues by
exercising its powers of competence under Section 16 of the Act. According to
this Section, an arbitral tribunal has the authority to rule on its jurisdiction if
there exists a valid arbitration agreement. If any party has an objection
regarding the invention of the tribunal then that party can file a plea before the
submission of defence.
 Settlement during arbitration

The parties are allowed to settle the dispute mutually even if the arbitration
proceedings are going on. If the parties arrive at the settlement amicably, the
arbitration proceeding will be terminated. Also if both the parties give their
consent to record the settlement then this would be known as a consent award
that would work as an arbitral award.

International Commercial Arbitration System

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International Commercial Arbitration System

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Arbitration is a procedure in which a dispute is submitted, by agreement of the parties,

Its principal characteristics are:

 Arbitration is a confidential procedure

International Commercial Arbitration system

The procedure to apply for international commercial arbitration is the same as

The International Chamber of Commerce (ICC) model arbitration clause, for

 The challenge to the appointment of arbitrators

1. When there are circumstances that raise reasonable suspicions about

 The mandate of the arbitrator

 Settlement during arbitration

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