Thursday, June 16, 2011

On the Applicability of Part I- A Guest Post



Anupama Kumar, a 4th year at NLS and member of the NLS Vis team that made it to the Round of 16 at this year's competition examines the question of implied exclusion of Part I of the Arbitration and Conciliation Act, 1996.


S. 2(2) of the Act provides that “this Part shall apply where the place of arbitration is in India.” In Bhatia International, this was read to mean that the application of Part I to international commercial arbitration had not been excluded. Nevertheless, parties to an international commercial arbitration would be free to derogate from even the non-derogable provisions of Part I, provided that such exclusion was express or implied in the agreement.


The question that follows here is, what exactly is an implied exclusion? According to Indtel Technical Services v. W.S. Atkins, merely designating a foreign law would not amount to an implied exclusion of Part I, notwithstanding the presumption that the proper law of arbitration follows the proper law of contract in NTPC v. Singer. A similar view was taken in Citation Infowares v. Equinox Corporation. Read together, it would appear that the only way by which parties could exclude the application of Part I would be to expressly specify the proper law of arbitration in the agreement.

Indeed, this appears to be the view of the Supreme Court in Dozco India v. Doosan Infracore, where it observed the specification of a seat of arbitration in the arbitration agreement would amount to an express exclusion of Part I. While Mr. V. Niranjan has noted – and I agree with this – that the treatment of this as an express exclusion may not be correct, it is nevertheless a positive step in clarifying the law on Part I.


Furthermore, the Court distinguished Citation and Indtel on the grounds that the seat of arbitration was not specified here, but appears to make a distinction between the seat of arbitration and the law governing the arbitration agreement itself. The Court analysed the interpretation of the seat of arbitration in some depth, referring to the discussion of this by Redfern and Hunter in considerable detail. Yet, the judgment appears to turn on the latter – that the law governing the arbitration agreement was stipulated in the arbitration agreement. Does specifying the seat of arbitration therefore amount to an implied exclusion of Part I? It is submitted that Dozco leaves this question unanswered.


It next remains to be asked whether the decision in Videocon served to shed some light on the matter. The question before the Supreme Court in Videocon related to the applicability of s. 9 of the Arbitration and Conciliation Act. The relevant provisions of the arbitration agreement read as follows:


33.1 Indian Law to Govern

Subject to the provisions of Article 34.12, this Contract shall be governed and interpreted in accordance with the laws of India.

33.2 Laws of India Not to be Contravened

Subject to Article 17.1 nothing in this Contract shall entitle the Contractor to exercise the rights, privileges and powers conferred upon it by this Contract in a manner which will contravene the laws of India

34.12. Venue and Law of Arbitration Agreement

The venue of sole expert, conciliation or arbitration proceedings pursuant to this Article, unless the Parties otherwise agree, shall be Kuala Lumpur, Malaysia, and shall be conducted in the English language. Insofar as practicable, the Parties shall continue to implement the terms of this Contract notwithstanding the initiation of arbitral proceedings and any pending claim or dispute. Notwithstanding the provisions of Article 33.1, the arbitration agreement contained in this Article 34 shall be governed by the laws of England. (Emphasis mine)


Would this amount to an implied exclusion of Part I of the Act?


The Supreme Court answered this in the affirmative, approving the view of the Gujarat High Court in Hardy Oil and Gas Limited v. Hindustan Oil Exploration Company Ltd., (2006) 1 GLR 658 that

...in cases of international commercial arbitrations held out of India provisions of Part-I would apply unless the parties by agreement, express or implied, exclude all or any of its provisions. In that case laws or rules chosen by the parties would prevail. Any provision, in Part-I, which is contrary to or excluded by that law or rules would not apply. Thus ... if the parties have agreed to be governed by any law other than Indian law in cases of international commercial arbitration, same would prevail. In the case on hand, it is very clear... that the parties' intention was to be governed by English law in respect of arbitration. ... It can be interpreted only to mean that in case of any dispute regarding arbitration, English law would apply. When the clause deals with the place and language of arbitration with a specific provision that the law governing arbitration will be the English law, such a narrow meaning cannot be given. (Emphasis mine)


It is my submission, that Hardy Oil does not apply in the circumstances. The curial law in Hardy Oil was English law.


But in Videocon, English law was the law governing the arbitration agreement, and not the arbitration itself, as pointed out here. The implication of this is that, where a foreign law governing the arbitration agreement is provided for, Part I of the Act is excluded. It is submitted, with respect, that this conclusion would be incorrect – the law governing the arbitration agreement is distinct from the curial law.


Where does that leave us? One may argue that, as per Dozco, the curial law is presumed to be that of the seat of arbitration chosen by the parties, and that in facts such as those in Videocon, the specification of a seat of arbitration would in turn amount to an implied exclusion of Part I. However, this would not be a correct reading of Dozco, nor indeed, is it the implication of Videocon. One may also argue that the law in Videocon is clear enough – that the parties must specify a foreign law of arbitration for Part I to be excluded, and the judgment simply overlooked the wording of the arbitration clause. This conclusion isn’t a particularly comfortable one, however, it leads to a far less absurd result.

So when is Part I excluded, and what amounts to implied exclusion? The answer remains as hazy as ever. It is submitted that a close reading of Videocon leads us to the same result, and that the decision itself is the result of incorrect reading of facts. We are therefore left where we started- if Part I of the Act is to be excluded, a foreign law of arbitration mus be specified n the arbitration agreement.

Monday, June 13, 2011

If you had a real life arbitration experience, fill the survey and help the arbitration community.



The Chartered Institute of Arbitrators (CIArb) has launched a major survey into the costs of international arbitration. The ‘Costs of Arbitration’ survey will gather data to inform parties, legal representatives and arbitrators about the overall costs of international commercial arbitration and how these are incurred at each stage.


The results will be analysed and presented at an international conference organised by CIArb and sponsored by Alvarez & Marsal on 27 - 28 September 2011 in London, aimed at uncovering ways in which costs might be reduced and the process streamlined to become more cost-effective and efficient. International arbitration has a justifiable reputation as the preferred method of dispute resolution for international commercial disputes. The worldwide economic downturn has accelerated a rising trend in favour of the use of international arbitration, where the enforceability of awards under the New York Convention gives it a major advantage over litigation in national courts. Globally, governments have invested in bringing their arbitration laws up-to-date and building modern arbitration centres to capitalize on this growing market.


However, as the size and complexity of disputes referred to international arbitration has increased, so too have concerns about the growing complexity, cost and time involved in the process, diminishing some of the very factors that make it preferable to the courts for commercial dispute resolution.


CIArb’s Costs of Arbitration survey will play a key role in understanding the present position and, together with the international conference on the Costs of International Arbitration, finding ways of tackling the problem and reducing the costs of arbitration.


Doug Jones SC FCIArb, Vice President of CIArb, a leading Chartered Arbitrator and a member of the organising committee for the conference said: “We invite all legal representatives, in-house counsel and arbitral tribunal members to contribute to this major survey into costs in international arbitration. The survey report and conference will provide an invaluable contribution to the debate on costs, helping to generate proposals to restore speed and cost-effectiveness to the arbitration process. This is essential if international arbitration is to maintain its position as the commercial dispute resolution method of choice.


“To make the survey effective, we need corporate counsel, party representatives, arbitrators and tribunal members to give us as much data as possible on arbitrations in which they have been involved.”


All participants in the survey will receive a report of the survey findings and a discount on the cost of attending the conference.


The launch of CIArb’s survey reflects the sustained growth of international arbitration worldwide and its importance to global corporations. Last month Queen Mary University of London released the findings of its 2010 survey exploring the factors that influence corporate choices about arbitration. CIArb’s survey will focus specifically on the crucial aspect of costs, a factor not specifically examined in the Queen Mary survey but one which is becoming ever more critical to all businesses, especially in the present economic climate.


The conference will assemble an array of distinguished speakers to discuss the impact of costs in different jurisdictions and sectors. It will include contributions from all those involved in the process, from in-house counsel in the commercial, construction, maritime and oil and gas sectors to lawyers, arbitrators and expert witnesses.


It will be an essential date in the diary for all practitioners, corporate counsel, chief executives, commercial and finance directors, international trade lawyers, investment advisers, policymakers and contract drafters.


To complete the Costs in Arbitration Survey (party representatives or arbitral tribunal members) please visit www.shape-the-future.com/costsurvey


To find out more information about CIArb’s Costs of International Arbitration conference or to register your interest, please visit CIArb’s conference site: www.ciarb.org/conferences/costs

Wednesday, June 8, 2011

The Vis Experience

An arbitrator who judged the memos and the oral rounds at this year's Vis moot shares his experinces here.

I would recommend it to anyone planning on doing the moot this year,as it gives you a complete picture of the goings on in Vienna during the period of the moot. Also recommended for those who wish to relive what many describe as the best week of their student life.

Sunday, June 5, 2011

Hannover invites applications for the position of Vis coach

Leibniz Universit├Ąt Hannover, Germany has invited applications for the post of Coach to the university teams for Willem C. Vis International Commercial Arbitration Moot, Vienna and Willem C. Vis (East) International Commercial Arbitration Moot, Hong Kong. The position is to be held for three years. The communication circulated by email is reproduced below:

Job Posting for the position of the Coach for the Hanover Vis Moot Team
The Institute for Procedural Law and Attorney Regulation is seeking for a Research and Teaching Associate (wissenschaftlicher Mitarbeiter; 50 % E-13). The position will be available from 1 September 2011 and will be limitedfor a time period of three years. The position is allocated at the Chair for Civil Law, International, European and German Civil Procedure (Professor Dr. Christian Wolf). The job holder will have the opportunity to do his/her Ph.D.-thesis (Doktorarbeit). The thesis can be written in Englishor German.

Job description
The Research Assistant will be in charge of the universities Willem C. Vis program including the participation in Hong Kong and Vienna. In addition to that s/he has to teach a one hour course per term in English language (in the field ofInternational Sales or Trade Law). Furthermore the job holder has to assist faculty members with their English publications.

Saturday, June 4, 2011

Anti arbitration injunctions - A guest post by Puneeth Nagraj

The following is a guest post by Mr. Puneeth Nagraj of NALSAR University of Law, Hyderabad. Mr. Nagraj was a member of the NALSAR team that reached the round of 16 in the Willem C. Vis International Commercial Arbitration Moot this year.

The New York Convention (NYC) and the UNCITRAL Model Law (UML) have certainly come a long way in creating a framework within which international arbitrations can proceed with minimal interference from courts. However, certain jurisdictional issues sometimes act as roadblocks for the smooth resolution of such disputes. One such issue is that of anti-arbitration injunctions. The main purpose of anti-arbitration injunctions is to prevent parallel proceedings which are against the will of the parties. By issuing such injunctions, courts 'preserve' their jurisdiction over the dispute.
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