SYMBIOSIS LAW SCHOOL, PUNE SUBMISSION OF: SUBMITTED TO

SYMBIOSIS LAW SCHOOL, PUNE SUBMISSION OF: ALTERNATE DISPUTE RESOLUTION SYSTEMS SUBMITTED TO: PROF. SHIRISH KULKARNI PROJECT TITLE: HOME ASSIGNMENT- INTERNAL BACKLOGS IN PARTIAL FULLFILLMENT OF THE DEGREE OF B.B.A. LL.B. SUBMITTED BY: GIRISH SAMPATH PRN: Question 1: Case Analysis of M/s. S.B.P. & Co. v. Patel Engineering Ltd. And Another (2005) 8, 618 Answer 1: The case analysed herewith has contributed substantially to the appointment of Arbitrators and making the domestic Arbitration affordable and effective since looking at the pendency of the cases before various Courts in this country and looking at the technicalities in Courts, many support the Alternative Dispute Resolution Mechanism (ADR) like “Arbitration”. Even the courts have highlighted the object of Arbitration and Conciliation Act, 1996. The history, the old act, the new act, the scheme of Arbitration Law in India is referred by the Hon’ble Supreme Court in many decisions and especially in M/s. S.B.P. & Co. Vs. M/s. Patel Engineering Ltd. and Another (2006 AIR(SC) 450 : 2005 (3) ArbLR 285: 2005 (8) SCC 618: 2005 (9) Scale 1: 2005 (9) JT 219 : 2005 (7) Supreme 610: 2005 (7) SCJ 461: 2005 (5) CTC 302, as follows: “2. Arbitration in India was earlier governed by the Indian Arbitration Act, 1859 with limited application and the Second Schedule to the Code of Civil Procedure, 1908. Then came the Arbitration Act, 1940. Section 8 of that Act conferred power on the Court to appoint an arbitrator on an application made in that behalf. Section 20 conferred a wider jurisdiction on the Court for directing the filing of the arbitration agreement and the appointment of an arbitrator. Section 21 conferred a power on the Court in a pending suit, on the agreement of parties, to refer the differences between them for arbitration in terms of the Act. The Act provided for the filing of the award in court, for the making of a motion by either of the parties to make the award a rule of court, a right to have the award set aside on the grounds specified in the Act and for an appeal against the decision on such a motion. This Act was replaced by the Arbitration and Conciliation Act, 1996 which, by virtue of Section 85, repealed the earlier enactment. 3. The Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act') was intended to comprehensively cover international and commercial arbitrations and conciliations as also domestic arbitrations and conciliations. It envisages the making of an arbitral procedure which is fair, efficient and capable of meeting the needs of the concerned arbitration and for other matters set out in the objects and reasons for the Bill. The Act was intended to be one to consolidate and amend the law relating to domestic arbitrations, international commercial arbitrations and enforcement of foreign arbitral awards, as also to define the law relating to conciliation and for matters connected therewith or incidental thereto. The preamble indicates that since the United Nations Commission on International Trade Law (UNCITRAL) has adopted a Model Law for International Commercial Arbitration and the General Assembly of the United Nations has recommended that all countries give due consideration to the Model Law and whereas the Model Law and the Rules make significant contribution to the establishment of a unified legal framework for a fair and efficient settlement of disputes arising in international commercial relations and since it was expedient to make a law respecting arbitration and conciliation taking into account the Model Law and the Rules, the enactment was being brought forward. The Act replaces the procedure laid down in Sections 8 and 20 of the Arbitration Act, 1940. Part I of the Act deals with arbitration. It contains Sections 2 to 43. Part II deals with enforcement of certain foreign awards, and Part III deals with conciliation and Part IV contains supplementary provisions.” If it is not possible to reduce the pendency before the traditional courts in this country and if approaching a court for relief is a tedious thing, then, there is nothing wrong in supporting the Alternative Dispute Resolution Mechanism. As the object of Alternative Dispute Resolution Mechanism is providing speedy relief and avoiding the technicalities like strictly adhering to the provisions of Civil Procedure Code, the Alternative Dispute Resolution Mechanism (ADR) should provide an affordable and effective relief to the litigants. But, as we have seen and heard from various people, there are many challenges in achieving the object behind the Alternative Dispute Resolution Mechanism (ADR) like “Arbitration” under “Arbitration and Conciliation Act, 1996”. Few concerns are as follows: It is an assumption only that the Alternative Dispute Resolution Mechanism like “Arbitration” provides a speedy relief. There are many cases where a dispute before an Arbitrator is pending for a long time like a proceeding in a Civil Court. Impartiality of the Arbitrator or the commitment of the Arbitrator to dispose of a case speedily is also a subject for discussion. Where sitting free is agreed to be paid to an Arbitrator, then, it is likely that the Arbitrator may frequently adjourn the matter on some grounds and it is very difficult to allege something on Arbitrator or to prove that a particular proceeding or an adjournment is not needed. Again, if the litigants are not committed to resolve the dispute speedily, then, they will proceed with the delay tactics by filing various interim applications and preferring an application under section 34 of the Arbitration and Conciliation Act, 1996 very frequently. These issues may appear to be simple, but, it is very difficult to address these issues. Thus, it can very well be said, at times, that it is an assumption that the Alternative Dispute Resolution Mechanism through “Arbitration” provides a speedy relief. On the other hand, in the recent past I have seen some cases, where the traditional civil court has passed a final judgment in a suit very speedily and within a span of one year or one and half year. Looking at the ground reality, I do strongly feel that traditional courts can provide effective and also speedy relief to the litigants and for that we may require few reforms in the system. There can not be any effective alternative to the traditional courts to the common man. It may be right to say that the Arbitration Mechanism is useful for the high-profile litigants, companies or where the stakes are very high. But, for common man, the Alternative Dispute Resolution Mechanism (ADR) is really effective and it is more so when a common man forced to submit himself to the Alternative Dispute Resolution Mechanism. There are ways to protract an Arbitration proceeding like the delay tactics adopted at times in Civil Court. It is not an exaggeration to say that there are ways to protract even an arbitration proceeding before arbitrator like the delay tactics adopted before the Civil Court at times in some cases. In fact, as the procedure to be followed before the Arbitration is not specific and it depends upon the discretion of the Arbitrator and the litigants at times, one can file any number of interim applications in an arbitration proceeding and challenging an interim-order; an application under section 34 can be filed and is filed in many cases. In fact, comparing a proceeding before Civil Court with an Arbitration proceeding, the procedure before Civil Court appears to be clear and certain. The appointment of Arbitrator has become a one-sided affair with many arbitration clauses in an agreement provides a right to only one party to choose the Arbitrator. Against the settled assumption and the all-round support to the Alternative Dispute Resolution Mechanism, we may concentrate on the issue of appointment of arbitrator by the Hon’ble Chief Justice under section 11 of Arbitration and Conciliation Act, 1996. While not dealing with the law of the land, we may not go to the issue of precedents on the issue with binding nature. But there is a shift in the concept pursuant to the judgment of Supreme Court in M/s. S.B.P. & Co. Versus M/s. Patel Engineering Ltd. and Another (2006 AIR (SC) 450: 2005 (3) ArbLR 285: 2005 (8) SCC 618: 2005 (9) Scale 1: 2005 (9) JT 219: 2005 (7) Supreme 610: 2005 (7) SCJ 461: 2005 (5) CTC 302). The appointment of Arbitrator by the Chief Justice under section 11 of the Arbitration and Conciliation Act, 1996 is seen as an administrative function and the judgment referred to above made it as a judicial function. It is not easy to come to an opinion as to whether it is better to see the function of the Chief Justice under section 11 of the Arbitration and Conciliation Act, 1996 as administrative or as judicial function. Because, if we consider it as an administrative function, then, at times, innocent public may suffer irreparable hardship as reasoned by the Hon’ble Supreme Court in M/s. S.B.P. & Co. Versus M/s. Patel Engineering Ltd. and Another. On the other-hand, if we treat the function of Chief Justice under section 11 of the Arbitration and Conciliation Act, 1996 as judicial function, then, it will burden the Chief Justice or there will be inordinate delay in getting an Arbitrator appointed by the Court. I would like to just extract the observations of Supreme Court in M/s. S.B.P. & Co. Versus M/s. Patel Engineering Ltd. and Another, dealing with the nature of the function of the Chief Justice under section 11 of Arbitration and Conciliation Act, 1996 and also the consequent observations like the arbitration is costly. The observations are as follows: “10. The appointment of an arbitrator against the opposition of one of the parties on the ground that the Chief Justice had no jurisdiction or on the ground that there was no arbitration agreement, or on the ground that there was no dispute subsisting which was capable of being arbitrated upon or that the conditions for exercise of power under Section 11(6) of the Act do not exist or that the qualification contemplated for the arbitrator by the parties cannot be ignored and has to be borne in mind, are all adjudications which affect the rights of parties. It cannot be said that when the Chief Justice decides that he has jurisdiction to proceed with the matter, that there is an arbitration agreement and that one of the parties to it has failed to act according to the procedure agreed upon, he is not adjudicating on the rights of the party who is raising these objections. The duty to decide the preliminary facts enabling the exercise of jurisdiction or power, gets all the more emphasized, when sub-Section (7) designates the order under sub-sections (4), (5) or (6) a 'decision' and makes the decision of the Chief Justice final on the matters referred to in that sub-Section. Thus, going by the general principles of law and the scheme of Section 11, it is difficult to call the order of the Chief Justice merely an administrative order and to say that the opposite side need not even be heard before the Chief Justice exercises his power of appointing an arbitrator. Even otherwise, when a statute confers a power or imposes a duty on the highest judicial authority in the State or in the country, that authority, unless shown otherwise, has to act judicially and has necessarily to consider whether his power has been rightly invoked or the conditions for the performance of his duty are shown to exist. 31. Moreover, in a case where the objection to jurisdiction or the existence of an arbitration agreement is overruled by the arbitral tribunal, the party has to participate in the arbitration proceedings extending over a period of time by incurring substantial expenditure and then to come to court with an application under Section 34 of the Arbitration Act seeking the setting aside of the award on the ground that there was no arbitration agreement or that there was nothing to be arbitrated upon when the tribunal was constituted. Though this may avoid intervention by court until the award is pronounced, it does mean considerable expenditure and time spent by the party before the arbitral tribunal. On the other hand, if even at the initial stage, the Chief Justice judicially pronounces that he has jurisdiction to appoint an arbitrator, that there is an arbitration agreement between the parties, that there was a live and subsisting dispute for being referred to arbitration and constitutes the tribunal as envisaged, on being satisfied of the existence of the conditions for the exercise of his power, ensuring that the arbitrator is a qualified arbitrator, that will put an end to a host of disputes between the parties, leaving the party aggrieved with a remedy of approaching this Court under Article 136 of the Constitution. That would give this Court, an opportunity of scrutinizing the decision of the Chief Justice on merits and deciding whether it calls for interference in exercise of its plenary power. Once this Court declines to interfere with the adjudication of the Chief Justice to the extent it is made, it becomes final. This reasoning is also supported by sub-section (7) of Section 11, making final, the decision of the Chief Justice on the matters decided by him while constituting the arbitral tribunal. This will leave the arbitral tribunal to decide the dispute on merits unhampered by preliminary and technical objections. In the long run, especially in the context of the judicial system in our country, this would be more conducive to minimising judicial intervention in matters coming under the Act. This will also avert the situation where even the order of the Chief Justice of India could be challenged before a single judge of the High Court invoking the Article 226 of the Constitution of India or before an arbitral tribunal, consisting not necessarily of legally trained persons and their coming to a conclusion that their constitution by the Chief Justice was not warranted in the absence of an arbitration agreement or in the absence of a dispute in terms of the agreement. Dragging a party to an arbitration when there existed no arbitration agreement or when there existed no arbitrable dispute, can certainly affect the right of that party and even on monetary terms, impose on him a serious liability for meeting the expenses of the arbitration, even if it be preliminary expenses and his objection is upheld by the arbitral tribunal. Therefore, it is not possible to accept the position that no adjudication is involved in the constitution of an arbitral tribunal.” Now, if we keep the issue of appointment of Arbitrators by the Court under section 11 of the Arbitration and Conciliation Act, 1996 apart, another important aspect comes when the right to appoint Arbitrator is conferred on one party to the agreement itself or when an Arbitrator is named in the agreement who is connected to one party either directly or indirectly. This is a very important thing to deal with. The Hon’ble Supreme Court of India in Indian Oil Corporation Ltd. & Others Versus M/s. Raja Transport (P) Ltd. (2009 (8) SCC 520, 2009 (8) MLJ 885, 2010 (2) LW 610, 2009 (8) SCJ 188), was pleased to observe as follows: “9. Arbitration is a binding voluntary alternative dispute resolution process by a private forum chosen by the parties. It is quite common for governments, statutory corporations and public sector undertakings while entering into contracts, to provide for settlement of disputes by arbitration, and further provide that the Arbitrator will be one of its senior officers. If a party, with open eyes and full knowledge and comprehension of the said provision enters into a contract with a government/statutory corporation/public sector undertaking containing an arbitration agreement providing that one of its Secretaries/Directors shall be the arbitrator, he can not subsequently turn around and contend that he is agreeable for settlement of disputes by arbitration, but not by the named arbitrator who is an employee of the other party. No party can say he will be bound by only one part of the agreement and not the other part, unless such other part is impossible of performance or is void being contrary to the provisions of the Act, and such part is severable from the remaining part of the agreement. The arbitration clause is a package which may provide for what disputes are arbitrable, at what stage the disputes are arbitrable, who should be the arbitrator, what should be the venue, what law would govern the parties etc. A party to the contract cannot claim the benefit of arbitration under the arbitration clause, but ignore the appointment procedure relating to the named Arbitrator contained in the arbitration clause. 13. We find no bar under the new Act, for an arbitration agreement providing for an employee of a government/ statutory corporation/public sector undertaking (which is a party to the contract), acting as Arbitrator. Section 11(8) of the Act requires the Chief Justice or his designate, in appointing an arbitrator, to have due regard to "(a) any qualifications required of the arbitrator by the agreement of the parties; and (b) other considerations as are likely to secure the appointment of an independent or impartial arbitrator". Section 12(1) requires an Arbitrator, when approached in connection with his possible appointment, to disclose in writing any circumstances likely to give rise to justifiable doubts as to his independence or impartiality. Sub-section 12(3) enables the Arbitrator being challenged if (i) the circumstances give rise to justifiable doubts as to his independence or impartiality, or (ii) he does not possess the qualifications agreed to by the parties. Section 18 requires the Arbitrator to treat the parties with equality (that is to say without bias) and give each party full opportunity to present his case. Nothing in sections 11, 12, 18 or other provisions of the Act suggests that any provision in an arbitration agreement, naming the Arbitrator will be invalid if such named arbitrator is an employee of one of the parties to the arbitration agreement. Sub-section (2) of section 11 provides that parties are free to agree upon a procedure for appointment of arbitrator/s. Sub-section (6) provides that where a party fails to act, as required under the procedure prescribed, the Chief Justice or his designate can take necessary measures. Sub-section (8) gives the discretion to the Chief Justice/his designate to choose an arbitrator suited to meet the requirements of a particular case. The said power is in no way intended to nullify a specific term of arbitration agreement naming a particular person as arbitrator. The power under sub-section (8) is intended to be used keeping in view the terms of the arbitration agreement. The fact that the named arbitrator is an employee of one of the parties is not ipso facto a ground to raise a presumption of bias or partiality of lack of independence on his part. 14. There can however be a justifiable apprehension about the independence or impartiality of an Employee-Arbitrator, if such person was the controlling or dealing authority in regard to the subject contract or if he is a direct subordinate (as contrasted from an officer of an inferior rank in some other department) to the officer whose decision is the subject matter of the dispute. Where however the named arbitrator though a senior officer of the government/statutory body/government company, had nothing to do with execution of the subject contract, there can be no justification for anyone doubting his independence or impartiality, in the absence of any specific evidence. Therefore, senior officer/s (usually heads of department or equivalent) of a government/statutory corporation/ public sector undertaking, not associated with the contract, are considered to be independent and impartial and are not barred from functioning as Arbitrators merely because their employer is a party to the contract. 19. While considering the question whether the arbitral procedure prescribed in the agreement for reference to a named arbitrator, can be ignored, it is also necessary to keep in view clause (v) of sub-section (2) ofSECTION 34 of the Act which provides that an arbitral award may be set aside by the court if the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties (unless such agreement was in conflict with any provision of Part-I of the Act from which parties cannot derogate, or, failing such agreement, was not in accordance with the provisions of Part-I of the Act). The legislative intent is that the parties should abide by the terms of the arbitration agreement. If the arbitration agreement provides for arbitration by a named Arbitrator, the courts should normally give effect to the provisions of the arbitration agreement. But as clarified by Northern Railway Administration, where there is material to create a reasonable apprehension that the person mentioned in the arbitration agreement as the Arbitrator is not likely to act independently or impartially, or if the named person is not available, then the Chief Justice or his designate may, after recording reasons for not following the agreed procedure of referring the dispute to the named arbitrator, appoint an independent Arbitrator in accordance with section 11(8) of the Act. In other words, referring the disputes to the named arbitrator shall be the rule. The Chief Justice or his designate will have to merely reiterate the arbitration agreement by referring the parties to the named arbitrator or named Arbitral Tribunal. Ignoring the named Arbitrator/Arbitral Tribunal and nominating an independent arbitrator shall be the exception to the rule, to be resorted for valid reasons.” The judgment of the Supreme Court becomes law and binds all the courts in India unless overruled by the larger Bench. In the judgment referred to above, the Hon’ble Supreme Court has emphasized the settled principles of impartiality etc. on the part of the Arbitrator and also dealt with the issue of apprehensions of an Arbitrator being one-sided. In my opinion, when it comes to appointment of an Arbitrator, there should be consensus between or among the parties and if there is no consensus, the party seeking reference of dispute to Arbitrator, can be able to approach the Court under section 11 of the Act for appointment of Arbitrator. The position with regard to the appointment of Arbitrator, taking all the ground realities into consideration, should be as follows: There need not be any bar in conferring the right to appoint an Arbitrator on one-party to the Agreement or even naming the Arbitrator in the Agreement. When the Arbitrator named in the Agreement or the right of one party to appoint an Arbitrator is opposed by other, then, the appointment of Arbitrator should be made by the Court under section 11 of the Act or by the competent authority under the Act irrespective of signing the Agreement or agreeing for the Arbitration clause in the Agreement. This arrangement can even reduce the delay in concluding the Arbitration proceeding. What happens is that, when a party is suspicious of an Arbitrator when the Arbitrator named in the Agreement or appointed by one party is connected to him/her in one way or other, then, the other party will try to drag the matter. As such, when the appointment is made upon the consent or by the Court, then, the delay in Arbitration can definitely be reduced. The cost of Arbitration is more at times. Arbitration is costly and it is more so, when the sitting fee is prescribed for an Arbitrator. The fee of the Counsel too, in Arbitration matters, would be high as he will be spending his substantial time solely on one matter. But, many are not aggrieved at the fee prescribed by the Court while appointing Arbitrators under section 11 of the Arbitration and Conciliation Act, 1996 as the court will consider many issues when it comes appointment and also when it comes to the remuneration to the Arbitrator. Applications under section 34 are preferred very frequently on interim orders passed by the Arbitrator in an Arbitration proceeding and it delays the entire Arbitration proceeding at times. Question 2: Essay on aims and objects of the New York Convention, 1958 The aims and objects may be assumed through the length of this essay that as a matter of logic, policy and practice, there is not sufficiently compelling reasons to change, clarify or abandon the Convention in its present form. This notwithstanding the fact that the Convention is an imperfect document. There is a problem of what, in practice, should be done. The position can lead to three different perspectives which need to be dealt with: Whether status quo can be maintained Whether amendment to the Convention, if considered, shall be productive The very success of NYC and its establishment as a world standard stands witness to the fact that it has stood the test of changing business realities, especially in the era of globalization, where such change was even more rapid. Thereby maintaining status quo in light of the issues raised is not only the best possible hypothesis but also the most desirable option. U.N.Doc A/CN.9/WGII/WP.108/Add. 1, para 17 As far as the ramifications of an amendment, a modification or a clarification are concerned, they are far-reaching whereby each of the suggested techniques come to a similar result and have a similar effect and each would result in a far worse position than if nothing were done at all. Therefore any amendment to the New York Convention would severely and possibly irreparably damage the current system of international arbitration. 16th ICCA Congress, 12-15 May 2002, London; Six Contemporary Issues, The requirement of a written form for arbitration agreement, Toby LandauWhile it has now been established that the an amendment process was yield not a productive, but on the contrary, a counter-productive result; it can be concluded by doctrine of elimination that maintaining status quo is the only viable option in such a scenario. The following issues reflect the aims and objectives of the Convention: That although the Signature Requirement of Article II(2) does not require Amendment but the recommendations of the Convention by General Assembly should be adopted for the better execution as the same addresses the problems adequately. That Anti-Suit Injunction is an important tool which is consistent with the requirement that a court refer a claim to arbitration. However, Article II(3) should not be amended to provide for such accomodations as the same can be raised only in exceptional circumstances. That that the provision of execution at the lowest court level would impose onerous conditions. Article III should not be amended to provide for only the conditions set forth in Article V as there can be other alternatives as well. That setting aside of arbitral awards is an area which is adequately dealt with through the Convention and no addendum is thereby required since Article V is self sufficient, if rightly interpreted. That public policy exception is a requisite for nations to also observe their ideological and legal stands and exercise the required freedom to disallow enforcement of awards which go against basic principles of morality and justice or their country’s policy. A distinction was also drawn between international and domestic policy and construed with reference to applicable law. That the phrase ‘may’ used in Article V(I) does not have the implication of a hierarchy where Article VII holds precedence. The more-favorable-rights provision has been shown to be a productive tool to garner international consensus, an attempt to achieve the intended objective through national legal systems being offered flexibility. That choice of law and public international law must be put in context in order to solve dilemmas regarding the distinction between law of place where the award was made and law under which the award was made. This relevant analysis vis-à-vis it’s recognition in the defence to enforceability was also elucidated. With a broad spectrum of issues discussed herein, it can be stated that tangible and significant contentions exist however, they are not sufficiently significant to warrant tampering with the New York Convention. Amendment is an easier option but on a cost versus benefit, the emasculation of NYC makes the costs outweigh the benefits. The immediate difficulty with any amendment is an unintended consequence: it would crystallize and confirm for all time the narrow interpretations of the Convention and by its very existence, the amendment would suggest that liberal interpretations are otherwise not tenable. On the other hand, if protocols and declarations are considered the way forward, it must be noted that one would lead to another. As long as the Convention has no protocols, the chances of any amendment are slim. Once there is one protocol, we will open the floodgates for many more and the current regime would delve into a new uncertainty. Reliance on national law, teleological interpretations, model law, reconciliation of inconsistencies and most importantly public international law are suggested as possible alternatives. Conflict of Laws: The Forgotten Resource of Public International Law and Interpretive Techniques The legal standpoint has been settled with regard to law governing arbitration proceedings and enforcement awards. However, it may be noted, that place where the arbitration took place may not be the same as the place where the award was made. All relevant scenario have been covered in Berg’s commentary of the Convention and mirrored herein. Comments submitted by the ICC in response to the Report by Secretary-General on the proposed Convention emphasized that the will of the parties should take precedence over the law of the country of origin. The International Chamber of Commerce commented: “ The ECOSOC Committee of Experts agrees with the ICC’s Preliminary Draft in that they consider that enforcement may be refused only is Article V(1)(e) empowers two jurisdictions to set aside awards: the country of origin and the country whose law governs the proceedings. It further provides that enforcement of an award can be refused if the party against whom the award is invoked proves that the award has been set aside (annulled, vacated) by a court of the country in which, or under the law of which, the award was made (“the country of origin”). According to Article VI of the Convention, a court may adjourn its decision on enforcement if the respondent has applied for a setting aside of the award in the country of origin and the application is pending in that country. The expression “competent authority” is normally a court having jurisdiction to entertain an action for setting aside in the country of origin. It rarely occurs that an action for setting aside the award in the country of origin is successful. It is questioned whether the circumstance that an arbitral award has been set aside in the country of origin, should lead to a refusal of enforcement. The French view is that a setting aside in the country of origin should be ignored altogether. The French courts arrive at this result by relying on their domestic law concerning the enforcement of foreign (international) awards in virtue of the more-favorable-right-provision of Article VII(1) of the Convention. French domestic law on enforcement of foreign (international) awards does not include as ground for refusal of enforcement that the award.Against the background of the foregoing, the “non-domestic” arbitral award may cover three categories of awards. (i) An award made in the Enforcement State under the arbitration law of another State. The reason that such an agreement is virtually never made is presumably that such an agreement can lead to complications as to the court which is competent in matters relating to the arbitration. (This was the genesis of the second definition as discussed at the New York Conference in 1958. The legislative history of the Convention reveals that the second definition was inserted into the Convention at the insistence of certain Civil Law countries.With this action they took the view that parties can agree to arbitrate in one country under the arbitration law of another country.) (ii) An award made in the enforcement State under the arbitration law of that State involving a foreign (or international) element. This award is the bone of contention however the poition on the same has been settled in US Court of Appeals for the Second Circuit in Bergesen v. Müller; (iii) An award that is regarded as “a-national” in that it is not governed by any arbitration law. The second definition supports the said award. As has been proven that the alleged inconsistency can be overcome by elaborate and appropriate reading of the statute in such a way that the divergence be recognized in the existing context. Despite the possible difference in the places referred to in Article V(1)(d) and V(1)(e), status quo need be followed so that choice of forum, being a point of difference in opinion as a matter of private international law may be accepted as is the aim of the Hague Conferences. The NYC is after all an international instrument which falls to be interpreted in accordance with rules of public international law which are quite different from those in most private law systems. Article 31(3)(a) of Vienna Convention provides that in interpreting treaties, there should be taken into account together with context any subsequent agreement between parties regarding interpretation or application of provisions. In the said case, interpretation being the way forward, might be entrenched and made universal without actually amending the Convention. Question 3: Drafting of Arbitration Agreement Answer 3: This Arbitration Agreement (“Agreement”) is entered into BETWEEN: V.K. Consultants Pvt Ltd., a corporation organized and existing under the laws of India, with their registered office situated at #360 BHEC Industrial Colony, Hebbal, Bangalore- 560095 AND: Nucleya Industries Pvt Ltd., a corporation organized and existing underthe laws of India, with their registered office situated at A/45 Orchid Flows Industrial Park, Sector 52, Gurgaon-122013 Hereinafter collectively referred to as “the Parties”, in consideration of the terms and covenants of this Agreement, and other valuable consideration, agree as follows: 1. Matters to be submitted to Arbitration All disputes and controversies of every kind and nature between the parties to this agreement arising out of or in connection with the Logistical Services Agreement dated 15th September 2015 as to the existence, construction, validity, interpretation or meaning, performance, non- performance, enforcement, operation, breach, continuance, or termination of the agreement shall be submitted to arbitration pursuant to the procedure agreed forth, by arbitration through the Indian Council of Arbitration in accordance with the Indian Council of Arbitration Rules, 2005. The parties, upon reading and understanding the aforementioned Rules, shall declare that they have accepted to comply with its terms, obligations and consequences beforehand. 2. Seat of Arbitration The parties have agreed to conduct to the arbitral proceedings at Pune, Maharashtra, India. In case the Indian Council of Arbitration fails to accept the same as the seat of arbitration, the Council shall provide the parties with an alternative seat of arbitration. Such alternative seat of arbitration shall be binding on the parties. 3. Applicable Law The parties have agreed on Indian Law as the applicable law to this arbitration. 4. Notice of Arbitration The party requesting arbitration shall do so by written notice to the other party. 5. Commencement of the Proceedings The arbitral proceeding shall commence on the date of receipt of the notice to arbitrate the dispute. 6. Arbitral Panel The arbitration proceedings shall be presided by an Arbitral Panel comprising of 3 (three) arbitrators. It is determined by the parties that the decision of the Panel shall be binding on the parties. Each party shall appoint one arbitrator each forming part of the Panel. The two arbitrators shall mutually appoint a third neutral arbitrator. This third arbitrator shall be designated as the Chief Arbitrator of the Arbitral Panel. 7. Decision of the Panel The three arbitrators forming the Arbitral Panel shall collectively arrive at a decision. In a situation where the arbitrators fail to arrive at a mutual decision, the decision of the Chief Arbitrator will preside over the other two arbitrators. Furthermore, this decision shall be considered final and binding. 8. Appointment of Arbitrators The parties have agreed on the appointment of the arbitrators with the counsel of the Indian Arbitration Council. The parties accept to nominate two arbitrators by themselves within 30 (thirty) days from the notification of the arbitration request to the defendant. The appointment of the Chief Arbitrator by the other 2 arbitrators within 15 (fifteen) days of the notification. In a situation where the two arbitrators cannot agree on the nomination of the Chief Arbitrator or in a situation where the Council does not approve the nomination of the Chief Arbitrator by the other arbitrators, the Council shall have the power to appoint the Chief Arbitrator. 9. Appointment by the Council The parties agree upon the appointment of all three arbitrators by the Indian Arbitration Council, at their discretion if they decide individually that they would prefer to leave it to the council for the appointment of the arbitrators. 10. Cost of Arbitration The parties agree that they will each be responsible for the costs of their own legal counsel and other costs incurred in preparing each party.s case for arbitration. The parties each undertake to pay half of the arbitration expenses that shall be notified subsequent to filing the suit before the Indian Council of Arbitration as an advance payment. Each party also undertakes to pay his share of the total expenses determined within the Arbitral Award approved by the Council. The parties undertake to pay the arbitration expenses in accordance with the Indian Arbitration Rules in the case of the reconciliation of the parties or the claimant waiving his claim after the dispute is submitted to the Indian Arbitration. In the case where the defendant does not pay half of the advance payment, then the claimant shall be obliged to pay the total advance payment amount. Fees and expenses of the arbitral proceedings and all the administrative costs of the arbitration, such as the cost of the hearing room, if any, shall be borne equally by the parties. 11. Terms of Reference The parties accept to sign the Terms of Reference, to be drawn up in the presence of the arbitrator(s) upon the invitation of the arbitrators (or the Chairman of the Arbitral Tribunal), that the arbitration procedures shall still continue without interruption and be effectual even if they abstain from signing it. The abstention of either one or both parties from signing the Terms of Reference shall not affect the validity of the Arbitral Award. 12. Statement of Claim Within 20 (twenty) days of the selection of the arbitrators, the claimant shall submit a written statement of claim to the arbitrators and to other party, containing a statement of facts, issues in dispute and remedies sought. 13. Statement of Defence Within 20 (twenty) days following the receipt of the statement of claim, the respondent shall submit a written statement of defence to the arbitrator and to the claimant. 14. Exchange of Information Each party shall deliver to the other party and to the arbitrator no later than 15 (fifteen) prior to the date set for a hearing, a copy of all documents and other materials on which the party intends to rely during the arbitral hearing. 15. Judgment: In case of appeal, judgment upon any arbitral award rendered may be entered in any court having jurisdiction in Pune, Maharashtra, India. The parties hereby undertake to accept and to comply with the provisions of this Agreement comprising 15 Articles as above. On behalf of On behalf of ____________ ___________ ____________ ___________ Question 4: Essay on the topic of UNCITRAL Answer 4: UNCITRAL’s work is organized and conducted at three levels. The first level is UNCITRAL itself, often referred to as the Commission, which works through an annual plenary session. The second level is the intergovernmental working groups, which to a large extent undertake the development of the topics on UNCITRAL’s work programme, while the third is the secretariat, which assists the Commission and its working groups in the preparation and conduct of their work. When world trade began to expand dramatically in the 1960s, national governments began to realize the need for a global set of standards and rules to harmonize and modernize the assortment of national and regional regulations, which until then largely governed international trade. They turned to the United Nations, which in 1966 recognized the need for it to play a more active role in removing legal obstacles to the flow of international trade and established the United Nations Commission on International Trade Law (UNCITRAL). UNCITRAL has since become the core legal body of the United Nations system in the field of international trade law. Much of the complex network of international legal rules and agreements that affects today's commercial arrangements has been reached through long and detailed consultations and negotiations organized by UNCITRAL. Its aim is to remove or reduce legal obstacles to the flow of international trade and progressively modernize and harmonize trade laws. It also seeks to coordinate the work of organizations active in this type of work and promote wider acceptance and use of the rules and legal texts it develops. MEMBERSHIP The Commission comprises 60 member States elected by the United Nations General Assembly for a term of six years. Membership is structured to ensure representation of the world's various geographic regions and its principal economic and legal systems. WORK METHODS Texts designed to simplify trade transactions and reduce associated costs are developed by working groups comprising all member States of UNCITRAL, which meet once or twice per year. Non-member States and interested international and regional organizations are also invited and can actively contribute to the work since decisions are taken by consensus, not by vote. Draft texts completed by these working groups are submitted to UNCITRAL for finalization and adoption at its annual session. SECRETARIAT The International Trade Law Division of the United Nations Office of Legal Affairs provides substantive secretariat services to UNCITRAL, such as conducting research and preparing studies and drafts. TRADE LAW TEXTS UNCITRAL develops different types of texts to modernize and harmonize the law of international trade. These texts are generally legislative in nature, such as conventions, model laws and legislative guides, or non-legislative texts such as contractual rules that can be incorporated into commercial contracts and legal guides. Convention: an agreement among States establishing obligations binding upon those States that ratify or accede to it. Model law: a set of model legislative provisions that States can adopt by enacting it into national law. Legislative guide: a text that provides guidance for the development of laws, discussing relevant policy issues and choices and recommending appropriate legislative solutions. Contractual rules: standard clauses or rules designed to be included in commercial contracts. Legal guide: a text that provides guidance for the drafting of contracts, discussing relevant issues and recommending solutions appropriate to particular circumstances. TECHNICAL LEGISLATIVE ASSISTANCE One of UNCITRAL's priorities is providing technical legislative assistance for modernization of trade laws and commercial practices. In addition to promoting understanding of international trade law texts and the benefits they can bring to the expansion of international trade, UNCITRAL assists States to develop the laws required to implement these legislative texts and commercial associations to promote the use of non-legislative rules. CLOUT The Case Law on UNCITRAL Texts system is a collection of court decisions and arbitral awards interpreting UNCITRAL texts. Currently, CLOUT includes case abstracts in the six United Nations languages on the United Nations Convention on Contracts for the International Sale of Goods (CISG) (Vienna, 1980) and the UNCITRAL Model Law on International Commercial Arbitration (1985). Other texts will be added as case law becomes available. ACHIEVEMENTS Over the last 24 years, UNCITRAL has completed major international texts on the sale of goods, transport, dispute resolution, procurement and infrastructure development, international payments, electronic commerce and insolvency. International arbitration, transport law, electronic commerce, insolvency law, security interests and public procurement are the focus of current work. Sale of goods United Nations Convention on Contracts for the International Sale of Goods (Vienna, 1980) • UNCITRAL Legal Guide on International Countertrade Transactions (1992) Transport of goods United Nations Convention on the Carriage of Goods by Sea (Hamburg, 1978) t More than 90 per cent of the world trade is carried by ship. Many of the exotic goods and commodities surrounding us reach us in this way. Many of them actually change hands several times during their voyage at sea. What happens in the case of loss of cargo? What if it is difficult or impossible to ascertain the moment when the loss occurred? UNCITRAL's work in the field of maritime law provides States with a common legal framework, establishing clear rules that contribute to reducing transport costs for the benefit of us, the final consumers. Dispute resolution UNCITRAL Arbitration Rules (1976) • UNCITRAL Conciliation Rules (1980) • Recommendations to assist arbitral tribunals and other interested bodies with regard to arbitrations under the UNCITRAL Arbitration Rules (1982) • UNCITRAL Model Law on International Commercial Arbitration (1985) UNCITRAL Notes on Organizing Arbitral Proceedings (1996) • UNCITRAL Model Law on International Commercial Conciliation (2002)