Comparative Guides
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Results: 4 Answers
International Arbitration
6.
Applicable law issues
6.1
How is the law of the arbitration agreement determined in your jurisdiction?
 
India
Indian law gives importance to the principle of territoriality. Therefore, the law of the arbitration agreement is determined on the basis of the seat of the arbitration.

In addition, Section 28 (Rules Applicable to Substance of Dispute) of the Arbitration Act provides that where the place of arbitration is in India, the following rules shall apply:

  • In an arbitration other than an international commercial arbitration, the tribunal shall decide the dispute submitted to arbitration in accordance with the substantive law in force in India;
  • In the case of international commercial arbitration:
    • the tribunal shall decide the dispute in accordance with the rules of law designated by the parties as applicable to the substance of the dispute;
    • any designation by the parties of the law or legal system of a given country shall be construed, unless otherwise expressed, as directly referring to the substantive law of that country and not to its conflict of laws rules; and
    • in the absence of agreement by the parties, the tribunal shall apply the rules of law it considers to be appropriate given all the circumstances.

Section 28 (as amended in 2015) further requires the tribunal to take into account the terms of contract and trade customs applicable to the transaction when deciding and making an award.

For more information about this answer please contact: Manoj Singh from Singh & Associates
6.2
Will the tribunal uphold a party agreement as to the substantive law of the dispute? Where the substantive law is unclear, how will the tribunal determine what it should be?
 
India
As per Section 28(1) of the Arbitration Act, the tribunal shall uphold a party agreement to the substantive law of dispute only in case of an international commercial arbitration where the place of arbitration is situated in India (as mentioned in Section 28(1)(b)(i)). Further as per Section 28(1)(a), in an arbitration other than an international commercial arbitration where the place of arbitration is situated in India, the tribunal shall mandatorily decide the dispute in accordance with the substantive law in force in India.

If the substantive law is unclear in an international commercial arbitration where the place of arbitration is situated in India, as per Section 28(1)(b)(iii) of the Arbitration Act, the tribunal shall apply the rules of law it considers to be appropriate given all circumstances surrounding the dispute. Further, as per Section 28(2), the tribunal shall decide ex aequo et bono or as amiable compositeur if the parties have authorised it to do so and taking into account the terms of the contract and trade customs applicable to the transaction.

For more information about this answer please contact: Manoj Singh from Singh & Associates