This blog on International Commercial Arbitration concerning India discloses the necessity, essentials, and relevant provisions of the Indian Legal System while dealing with disputes in the international sphere.
Generally, a problem is resolved before the court through litigation, but if the parties wish for Arbitration, that includes the involvement of a third party who will try to discuss and suggest possible measures to be taken by both parties and the whole process will be done outside the court. The relevant Act dealing with Arbitration in India is the Indian Arbitration and Conciliation Act, of 1996.
International Commercial Arbitration is a process of resolving disputes that are commercial among countries through an Arbitrator or a panel of which are commercial. There were several discussions as to the cases to be considered as “Commercial”, the New York Convention, the 1961 European Convention, and settled through the Model Law, etc.
All the states enter into various agreements regarding Trade, Intellectual Property Law, Investments and contracts, etc., so if there’s any breach relating to the same, International Commercial Arbitration plays its role in resolving the dispute. The parties involved may be Natural persons as well as Juristic Persons.
According to Section 2(1)(f) of the Indian Arbitration and Conciliation Act,1996, “international commercial arbitration” means an arbitration relating to disputes arising out of legal relationships, whether contractual or not, considered commercial under the law in force in India and where at least one of the parties is,
Agreement: International Commercial Dispute initiates with the parties in dispute signing an ‘Arbitration Agreement’ mentioning all the terms and conditions regarding arbitration which is mentioned u/s 7(1) of the Indian Arbitration and Conciliation Act,1996.
Seat of Arbitration: Seat of Arbitration refers to the location that is decided by the parties for the legal process of Arbitration. There are several rules which differ from one to another based on the seat of Arbitration in India.
If the seat agreed by the party is India for the dispute resolution through Arbitration, then that would be dealt with under part I of the Indian Arbitration and Conciliation Act,1996 and if the seat is outside India, part I would not be applicable and would be dealt under part II of the Act.
In this case, Both parties entered into a contract regarding the sale and purchase of goods. The contract contained an arbitration clause that specified that if there’s any dispute arose, that would be resolved by the International Chamber of Commerce located in Paris. When the dispute arose, Bhatia International initiated the arbitration proceeding Under the Indian Arbitration and Conciliation Act, of 1996. The respondent objected to the jurisdiction of the Indian courts to entertain the arbitration.
It was held that only Indian courts have exclusive jurisdiction to test the significance of an arbitral award that is made in India, even if the actual law of the agreement is the law of another country and not in India.
In this judgment, the court held that Part I of the act would not apply to the cases where the seat of arbitration is outside India. It shall apply to only those arbitrations where the seat of the arbitration is India and under Part I of the Act, no suit can be filed for interim relief in India when the seat of arbitration is not in India.
To get more legal updates, keep visiting www.daslegal.co.in
As per the rules of the Bar Council of India, law firms are not permitted to solicit work and advertise. By clicking the “Agree” button and accessing this website (www.daslegal.co.in) the user fully accepts that you are seeking information of your own accord and volition and that no form of solicitation has taken place by the Firm or its members.
The information provided under this website is solely available at your request for information purposes only. It should not be interpreted as soliciting or advertisement. The firm is not liable for any consequence of any action taken by the user relying on material / information provided under this website. In cases where the user has any legal issues, he/she in all cases must seek independent legal advice.