07-08-2020

The binding nature of the ADR

Jurisdictional method, non-jurisdictional method.

Litigation+ Arbitration= Jurisdictional -> Outcome of a Jurisdictional method id always

binding.

Other methods come under Non-Jurisdictional. (Mediation, conciliation etc.) -> Non-
Jurisdictional outcome not binding unless u enter into an agreement/contract to make it
binding.

By an agreement, u cannot change the binding nature of an award that is legally and
jurisdictionally binding.

Difference between mediation and conciliation? Do we have any law/rule for mediation? Part
3 talks about conciliation in ADRMCA

Sec 89 ADRMCA- M&C differently used.

Regarding the role to be played by the mediator and the conciliator. Mediator will never play
a pro-active role in the entire process of the mediation, whereas the conciliator will always
play a pro-active role in conciliation. The conciliator may formulate the terms of the
settlement, whereas a mediator will not be allowed to formulate the terms of the settlement.

Mediators and conciliators, both, provide a favorable situation for the parties to reach a
settlement. Here, the conciliator may formulate the terms, where a mediator cannot, in our
jurisdiction. But in US jurisdiction, the situation is exactly opposite.

Core issues of Arbitration.

1st thing- Arbitration Agreement (AA). Before going ahead with the Arbitration procedure,
the arbitrator must ensure that there is a varied AA existing between the parties. Without the
AA there cannot be any arbitration done.

 Clause arbitration agreement: in almost every commercial contract, there exists a

arbitration clause. The agreement that any dispute between the parties shall be dealt
with arbitration. The clause shall itself be treated as AA, it will be treated as a
separate agreement, shall be treated as a separate contract b/t the parties.
  Submission agreement: When certain disputes come forth, the concerned parties make
an exclusive agreement to resolve the issue with arbitration.

Features of Arbitration

1. Party Autonomy: Party autonomy plays a very crucial role in the success of the
arbitration as it makes the procedure more flexible. It is the autonomy of the
parties to decide the aspects of the arbitration. The consent of both the parties is
there in this decision making/setting of the arbitration procedure. This flexibility is
one of the reasons for the arbitration to be more popular in the commercial
contracts.
2. Principle of the separability: By applying this principle, the parties agree to
recognize the arbitration clause as separate from the underlying contract.
10-08-2020
3. Principle of competence-competence: Arbitration law has given the power to the
arbitrator to decide its jurisdiction. If there is a jurisdictional challenge then the
jurisdiction has to be decided by the arbitrator. Just coz a party takes part in the
process of selection of the arbitrator, it does not preclude that party from
challenging the jurisdiction.
Jurisdictional award of the arbitrator.

The jurisdiction of the arbitrator can be challenged on what basis?

i. Existence of the arbitration agreement-

~there could be certain circumstances where in a cases the jurisdiction is
being challenged on the basis of the existence of a contract. So, if parties
never enter into a contract then there does not exist a agreement of
arbitration.
ii. Validity of the arbitration agreement-
It can be of 2 types. Formal validity & and the substantive validity.
a. Formal Validity is the form requirement of the agreement (can also be
called the written requirement. Depending on the form requirement of
the place and stuff).
b. Substantive validity, where a party has no capacity (no capacity as per
the contract act) to enter into the arbitration agreement, i.e. the things
that enter into the legality of the agreement.
 iii. Scope of the arbitration agreement-
if the dispute at hand does not fall under the scope of the arbitration
agreement, then the jurisdiction can be challenged on the basis of the
scope of the arbitration agreement.

Q. When the contract of a company expires per se, but the disagreement/issue arisen after
that, then the arbitration clause is applicable or not?
-> If a party proves that even after the expiry of the contract the arbitration clause is still valid
then arbitration can be opted for. But if the other party proves that as soon as the contracted
ended, the arbitration clause ended too then arbitration cannot be opted for. Hence, it depends
on the facts and technicalities of the case. It is basically the separability principle.

13-08-2020

The positive and the negative jurisdictional award.

The positive jurisdictional award- If the arbitrator decides that he has the jurisdiction then

The Negative jurisdictional award- Challenge regarding the jurisdiction of the arbitrator is
upheld (by the arbitrator). Hence, the jurisdiction is declined.

1st practice- The general practice-is that if a party challenges the jurisdiction in arbitration
then the parties cannot run to the national court when the award is positive, until and unless
the final award comes into picture.

2nd practice- The moment the tribunal gives the jurisdictional award, the aggrieved party can
go to the court if disagreeing with it.

The UNCITRAL Arbitration law was established for the equal and fair arbitration among the
countries (parties from different countries) following the law.

14-08-2020

The choice of law. In arbitration, at any time, different set of laws/rules can be applicable. It
is the Separability presumption. It is separate from the contract law, and concerning the
matter & the parties involved, the set of laws can differ. The parties can be of different
places/countries etc. The applicability of separate set of laws simultaneously is acceptable.
4 elements governing Commercial arbitration- Contract, Arbitration agreement, Arbitration
proceeding, and Seat of the arbitration. All these elements are governed by different laws.
Due to the ‘party autonomy’, the parties may decide ki konsa element will be governed by
konsa law ya konse jurisdiction ka law.

So, choice of law= the parties have the option to choose any law to be applicable to a
particular aspect of their relationship (between the commercial business) (example- Contract,
Arbitration agreement, Arbitration proceeding, and Seat of the arbitration)

What if the chosen laws are inconsistent at some time? (Big question. To be addressed later)

Can one of the parties challenge the governing laws? –Yeah, when parties haven't designated
the governing law, i.e. when they're silent as to the choice of law. But in the case, the
governing law is designated expressly in the agreement, can the other party still challenge the
governing law challenging party autonomy? -> NO

So, what exactly is the role of the national court in an arbitration?

Sec5 of Arbitration act- No judicial authority shall intervene unless it has been permitted.

Sec11- Whenever one of the parties is not cooperating for the appointment of the arbitrator
then the other party can approach the supreme court of India for the redressal.

To divide the arbitration act in stages, here are 3 stages/phases. 1. Beginning, 2. During, 3.
End

Read sec 5, 8, 11 & 16 of Indian Arbitration Act for understanding the involvement of
national courts in the arbitration procedure. -> https://indiankanoon.org/doc/1052228/

Is there a limit on how many times can a party approach the national court? -> It depends on
the situation, the matter of dispute.

Convention on the Recognition and Enforcement of Foreign Arbitral Awards, and The New
York convention 1958
 To deal with conflicts when a party is of a foreign country.
https://www.uncitral.org/pdf/english/texts/arbitration/NY-conv/New-York-Convention-E.pdf

Article 2 – clause 1&3, Article 8 etc….

Sec 5,4,9,8 of Indian Arbitration act same as the article 4,5,8,9 of UNCITRAL Model law.
(Read all these sections and articles from the above links.)

The New York Convention 1958 started for the enforcement of the UNCITRAL Model law,
also, UNCITRAL Model law has taken power/courage from the NYC 1958.

Enforcement of the arbitral award

Setting aside of the arbitral award- to be done in front of the ----

Recognition and enforcement of the award------

Q-"The country where the award was made"....they are referring to arbitration seat?
Read Article 5 abhi…. To understand the foreign arbitral award, its enforcement and stuff.

04-09-2020

Arbitrability and Public Policy- The two rounds which even if not raised, on which the court
may refuse recognition and enforcement of award. –Art 5(2)

However, the grounds under Article 5(1) need to be raised by the parties before the court.
This is the difference between these two clauses.

By the principle of party autonomy, parties can choose any law applicable to any part of the
arbitration (choice of law).

Laws governing arbitration are determined by the seat.

Law governing underlying contract determine the rights and liabilities of the parties.

Law governing arbitration agreement determines “substantive validity” not “formal validity”

Laws governing arbitration proceedings govern day to day procedural issues

Lex arbitri= law of seat= Curial Law

“Curial aw” generally signifies procedural law, as well as substantive law of arbitration.

This choice of law is very important because it ascertains relationship of tribunal with
national court. For example, when an award comes out, whether you can go for appeal or
setting aside will be determined by law of the seat.

05-09-2020
Lex Arbitri- seat of the arbitration

Party Autonomy- Parties can choose the seat of the arbitration

Transnational rules/laws applied in the arbitration

Geographical delocalization, legal delocalization

10-09-2020

Article 1(1) – No enforcement of the award in a country where it is made.

Apply the de-localization concept to this Art 1(1)

Read sec 5, 8, 9, 11, 34 & 48 of A& C Act. Read the latest amended provision

34& 48- similar grounds to that of article 5.

Sec 2(2) this part shall apply to an arbitration taking place inside of India.

The ‘forum shopping’ concept.

What is the legal consequence of the Separability principle?

What is Indirect control mechanism?- courts indirect control in arbitration.

17-09-2020

Case Studies

 The Branch Manager, Magma Leasing & Finance Ltd and Another v. Potluri
Madhavilata, 18.09.2009
A financial institution providing plans for purchase of machinery.
 Heyman & Anr v. Darwin Ltd 1942  the observation was not just confined to the scope
on hand.
 Mulheim Pipe Coatings GMBH v Welspun Fintrade Ltd (2013)- disurge of a contract
with accord and satisfaction
 (2014) 6 SCC 677
 Swiss Timing Ltd v Commonwealth games 2010 Organising Committee
 (2003) 6 SCC 503
 (2000) 4 SCC 539