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INTERNATIONAL ARBITRATION


Submitted to:
Mr. Soumya Kanti Sinha
Faculty, International Commercial Arbitration

Submitted by:
Rajat Agrawal
Roll No 106

Semester VII, B. A., LL. B (Hons.)

Submitted on:
10
th
October, 2014


Hidayatullah National Law University Raipur, Chhattisgarh


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TABLE OF CONTENTS:

ACKNOWLEDGEMENTS 3
RESEARCH METHODOLOGY 4
INTRODUCTION 5
MAIN FEATURES OF INTERNATIONAL ARBITRATION 6
DIFFERENCES WITH DOMESTIC ARBITRATION AND MEDIATION 7
THE ADVANTAGES OF INTERNATIONAL ARBITRATION 8
NEUTRALITY AND ENFORCEABILITY OF ARBITRATION AWARDS 9
INTERNATIONAL COMMERCIAL ARBITRATION 11
INTERSTATE ARBITRATION 13
CONCLUSION 14
BIBLIOGRAPHY 15










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ACKNOWLEDGEMENTS

I feel highly elated to work on the topic.
The practical realization of this project has obligated the assistance of many persons. I express
my deepest regard and gratitude for our Faculty of ICA. Their consistent supervision, constant
inspiration and invaluable guidance have been of immense help in understanding and carrying
out the nuances of the project report. I take this opportunity to also thank the University for
providing extensive database resources in the Library and through Internet.

Rajat Agrawal
Semester-VII




















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RESEARCH METHODOLOGY:

Secondary data has been used. The study is descriptive and analytical in nature.

Books and other reference as guided by Faculty of ICA have been primarily helpful in giving this
project a firm structure. Websites, dictionaries and articles have also been referred.

















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INTRODUCTION

The world of international law can be a daunting place. Conflicting judicial systems, different
languages, cultures, and economic and political climates create significant obstacles to resolving
international disputes. Arbitration provides an efficient, neutral means of resolving international
disputes, but for those unfamiliar with it, the arbitration process can be confusing to navigate.
International arbitration is a leading method for resolving disputes arising from international
commercial agreements and other international relationships. As with arbitration generally,
international arbitration is a creation of contract, i.e., the parties' decision to submit disputes to
binding resolution by one or more arbitrators selected by or on behalf of the parties and applying
adjudicatory procedures, usually by including a provision for the arbitration of future disputes in
their contract
.1
The practice of international arbitration has developed so as to allow parties from
different legal and cultural backgrounds to resolve their disputes, generally without the
formalities of their respective legal systems.








1
Gary B. Born, International Commercial Arbitration, 187, 197, 217 (2009); Julian M. Lew, Loukas A. Mistelis &
Stefan M. Krll, Comparative International Commercial Arbitration 1-10 to 1-11, 6-1 to 6-6 (2003)
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MAIN FEATURES OF INTERNATIONAL ARBITRATION
International arbitration has enjoyed growing popularity with business and other users over the
past 50 years. There are a number of reasons that parties elect to have their international disputes
resolved through arbitration. These include the desire to avoid the uncertainties and local
practices associated with litigation in national courts, the desire to obtain a quicker, more
efficient decision, the relative enforceability of arbitration agreements and arbitral awards (as
contrasted with forum selection clauses and national court judgments), the commercial expertise
of arbitrators, the parties' freedom to select and design the arbitral procedures, confidentiality and
other benefits.
International arbitration is sometimes described as a hybrid form of dispute resolution, which
permits parties broad flexibility in designing arbitral procedures. As one example, consider the
International Bar Association (IBA)'s Rules on the Taking of Evidence in International
Commercial Arbitration, revised in 2010.
2
These rules adopt neither the common law
jurisdictions' broad disclosure procedures (Discovery), nor follow fully the civil law in
eliminating entirely the ability to engage in some disclosure-related practices. The IBA Rules
blend common and civil systems so that parties may narrowly tailor disclosure to the agreement's
particular subject matter.
David Rivkin, who chaired the committee that drafted the rules, has noted that the wide adoption
of these rules in international arbitration has led in practice to an unexpected use by common law
practitioners to limit disclosure and by civil law practitioners to expand it. With a possibly more
intuitive cause and practical effect, arbitral tribunals will often read party election of the IBA
Rules as an election most akin to US-style Discovery. This is hardly surprising given the Rules'
language and the IBA's close ties through the years to the American Bar Association (ABA).
Rules of evidence represents just one example of the different practice that applies to
international arbitration, and which distinguishes it from provincial forms of arbitration rooted in
the procedures of a particular legal system. There are a variety of approaches to international

2
Gary B. Born, International Commercial Arbitration, 187, 197, 217 (2009); Julian M. Lew, Loukas A. Mistelis &
Stefan M. Krll, Comparative International Commercial Arbitration 1-10 to 1-11, 6-1 to 6-6 (2003)
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arbitration at the national level, even where model laws have been adopted.
3
These approaches
can be further impacted by arbitral rules that may be agreed between the parties. Similarly,
international arbitral practice has given rise to its own non-country-specific standards of ethical
conduct which are believed to apply in international proceedings and, more to the point, to the
arbitrators who are appointed to conduct them.
DIFFERENCES WITH DOMESTIC ARBITRATION AND MEDIATION
International arbitration is a significant variant of the practice in many countries of arbitration,
from which it is derived and shares many features. It is not just the fact that international
arbitration arises in the context of international contracts that makes it different. In the
international dispute resolution community, it is widely accepted to be a different animal
entirely, involving different practices and rules, and being represented by a different community
of arbitrators and legal practitioners.
It is essential to draw a firm distinction between Arbitration and Mediation or Conciliation,
which are both sometimes characterized as forms of ADR (Alternative Dispute Resolution). In
countries where mediation is new or struggling to be introduced as a concept, this association has
given rise to the misleading impression that mediation is a form of non-binding arbitration, with
the arbitrator proposing or suggesting outcomes based on an assessment of the parties' rights. In
fact, arbitration and mediation or conciliation are fundamentally different: the former is a binding
determination of legal rights, the latter two forms of dispute resolution involve facilitated
negotiation which aims at producing a consensual settlement. The one leads to a binding
determination (arbitration), the other only in the event the parties agree to settle their dispute on
mutually satisfactory terms (mediation).




3
Sachs, Klaus. "CMS Guide to Arbitration: Foreword". CMS Legal. Retrieved 1 May 2012.
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THE ADVANTAGES OF INTERNATIONAL ARBITRATION
For international commercial transactions, the parties may face many different choices when it
comes to including a mechanism for resolving disputes arising under their contract. If they are
silent, they will be subject to the courts of wherever a disaffected party decides to initiate legal
proceedings and believes it can obtain jurisdiction over the other party. This may not sit well
with parties that need to know at the time of entering into their contract that their contractual
rights will be enforced. The alternative to silence is to specify a method of binding dispute
resolution, which can be either litigation before the domestic tribunal of one of the parties or
arbitration. If the parties choose to resolve their disputes in the courts, however, they may
encounter difficulties.
The first is that they may be confined to choosing one or the others' courts, as the courts of a
third country may decline the invitation to devote their resources to deciding a dispute that does
not involve any of that country's citizens, companies, or national interests. An exception to that
rule is New York State, which will not entertain a forum non conveniens motion when the
dispute concerns a contract that is worth one million dollars or more and in which the parties
included a choice-of-law clause calling for application of New York law. The second, and
perhaps more significant difficulty, is that judicial decisions are not very "portable" in that it is
difficult and sometimes impossible to enforce a court decision in a country other than the one in
which it was rendered.






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NEUTRALITY AND ENFORCEABILITY OF ARBITRATION AWARDS
The ability to resolve disputes in a neutral forum and the enforceability of binding decisions are
often cited as the main advantages of international arbitration over the resolution of disputes in
domestic courts. And there is solid legal support for this view. The principal instrument
governing the enforcement of commercial international arbitration agreements and awards is the
United Nations Convention on Recognition and Enforcement of Foreign Arbitral Awards of
1958 (the "New York Convention").
4
The New York Convention was drafted under the auspices
of the United Nations and has been ratified by more than 140 countries, including most major
countries involved in significant international trade and economic transactions. The New York
Convention requires the states that have ratified it to recognize and enforce international
arbitration agreements and foreign arbitral awards issued in other contracting states, subject to
certain limited exceptions. These provisions of the New York Convention, together with the
large number of contracting states, has created an international legal regime that significantly
favors the enforcement of international arbitration agreements and awards.
5

As a practical matter, what that means is that an international award originating in a country that
is a party to the New York Convention may be enforced in any other country that is also a
signatory, as if that award were actually rendered by the domestic courts of that second country.
Here is an example of this important concept: assume that parties from countries A and B have
agreed to resolve their disputes in country C, and all three countries are parties to the New York
Convention. This will mean that even though the arbitration will take place in country C, the
resulting award can be enforced in countries A or B, as if it were a court decision rendered in the
domestic courts of that country. (By contrast, there is no equivalent treaty for the international
recognition of court decisions, although a draft treaty, the Hague Convention of 30 June 2005 on
Choice of Court Agreements, was concluded in 2005, but had as of 2013 not entered into force).
Thus, parties to international contracts can decide to site their disputes in a third, neutral country,
knowing that the eventual award can be easily enforced in any country that is a signatory to the

4
Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 (the New York
Convention), June 10, 1958, http://www.uncitral.org/uncitral/en/uncitral_texts/arbitration/NYConvention.html
5
Gary B. Born, International Arbitration And Forum Selection Agreements: Drafting And Enforcing 10-11, 123-124
(3rd ed. 2010)
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New York Convention, which has been ratified by a significant majority of commercial nations
(with notable exceptions like Iraq, which, not having ratified the New York Convention, cannot
be assumed to give effect to arbitration decisions rendered in other countries). An international
award therefore has substantially greater executory (legal) force than a domestic court decision.
Under the New York Convention, if a party to arbitration commences legal proceedings in
breach of an arbitration agreement against another contracting party, the court is obligated to stay
the proceedings. Chapter 2 of the Federal Arbitration Act sets forth the statutory basis for an
American court to issue a stay in connection with contracts falling within the ambit of the New
York Convention.
6














6
Guide to Arbitration in New York". CMS Legal. Retrieved 8 May 2012.
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INTERNATIONAL COMMERCIAL ARBITRATION
The resolution of disputes under international commercial contracts is widely conducted under
the auspices of several major international institutions and rule making bodies. The most
significant are the International Chamber of Commerce (ICC), JAMS International, the
International Centre for Dispute Resolution (ICDR), the international branch of the American
Arbitration Association), the London Court of International Arbitration (LCIA), the Hong Kong
International Arbitration Centre, and the Singapore International Arbitration Centre (SIAC).
Specialist ADR bodies also exist, such as the World Intellectual Property Organisation (WIPO),
which has an arbitration and mediation center and a panel of international neutrals specialising in
intellectual property and technology related disputes.
A number of arbitral institutions have adopted the UNCITRAL Rules for use in international
cases.
The most salient feature of the rules of the ICC is its use of the "terms of reference." The terms
of reference is a summary of the claims and issues in dispute and the particulars of the
procedure, and it is prepared by the tribunal and signed by the parties near the beginning of the
proceedings.
7

In a more recent development, the Swiss Chambers of Commerce of Industry of Basel, Berne,
Geneva, Lausanne, Lugano, Neuchtel and Zurich have adopted a new set of Swiss Rules of
Commercial Mediation that are designed to integrate fully with the Swiss Rules of International
Arbitration that were previously adopted by these chambers to harmonize international
arbitration and mediation proceedings across Switzerland. For a recent paper on these two sets of
ADR rules and how they may be combined.
International Arbitration Institute (IAI)
The International Arbitration Institute, headed by Emmanuel Gaillard, was created in 2001 under
the auspices of the Comit Franais de lArbitrage (CFA) to promote exchanges and
transparency in the international commercial arbitration community.

7
http://www.alway-associates.co.uk/legal-update/article.asp?id=72
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The Association for International Arbitration (AIA)
The Association for International Arbitration is a non-profit organization, founded in Paris in
2001 by Johan Billiet. The Association for International Arbitration has an increasing number of
members among arbitrators and mediators of international backgrounds.
The Association was established with the aim of facilitating arbitration, mediation and general
forms of dispute resolution internationally. Today, the AIA has developed into an organization
dealing in the private international law field to meet the needs of the fast-growing evolution of
dispute resolution within the international community. AIA provides information, training and
educational activities to expand the promotion of arbitration and ADR globally by means of
securing partnerships with various organizations and parties to get involved in the life of the
association. The association constantly works to develop partnerships in the international realm
and to provide the international community of arbitrators and ADR professionals with
continuous exposure to the latest international developments, activities and opportunities in the
field. AIA continually encourages the participation and contribution of its members in the pursuit
of the associations goals.









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INTERSTATE ARBITRATION
Arbitration has been used for centuries, including in antiquity, for the resolution of disputes
between states and state-like entities.
8
After a period of relative disuse, Jay's Treaty between the
United States and Great Britain revived international arbitration as a means of resolving inter-
state disputes. The 1899 and 1907 Hague Conferences addressed arbitration as a mechanism for
resolving state-to-state disputes, leading to the adoption of the Hague Conventions for the Pacific
Settlement of International Disputes. The Conventions established the Permanent Court of
Arbitration and a rudimentary institutional framework for international arbitration of inter-state
disputes. In recent years, international arbitration has been used to resolve a number of disputes
between states or state-like entities, including Eritrea v. Yemen, the Abyei Arbitration, the
OSPAR Arbitration,

and the Iron Rhine Arbitration.
9
















8
Jackson H. Ralston, International Arbitration From Athens To Locarno 153-154; John L. Simpson & Hazel Fox,
International Arbitration: Law And Practice 1 (1959)
9
Iron Rhine Arbitration (Belgium v. Netherlands) (Perm. Ct. Arb. 2005), http://www.pca
cpa.org/showpage.asp?pag_id=1155
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CONCLUSION

International Arbitration provides the legal panorama with a peace ful and amicable way of dispute
settlement and is preferred over the traditional way of court proceedings. When we talk about
i8nternational arbitration it has become very easier with the help of International arbitration which has
various model laws and in India even in Arbitration and Conciliation Act, 1996 has provisions for
recognition of Foreign awards by the way of Geneva Conventions and New York Conventions. With
these conventions and various other directives towards facilitating the international arbitration.

Problem arises only when the law related with international arbitration and domestic law clash with each
other then which rule to follow by the change in the international law now way of settlement by the way
of International Arbitration is preferred as it provides more convenient and peaceful way of settlement.

















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BIBLIOGRAPHY
Books:
1. O P MALHOTRA & INDU MALHOTRA, THE LAW OF PRACTICE OF ARBITRATION AND
CONCILIATION (2
nd
ed. 2006).
2. AVTAR SINGH, LAW OF ARBITRATION & CONCILIATION AND ALTERNATIVE DISPUTE
RESOLUTION SYSTEMS, (9
th
ed. 2009).
3. A.K BANSAL, LAW OF INTERNATIONAL COMMERCIAL ARBITRATION (6
th
ed. 1999).
4. P.C ROY, THE LAW OF ARBITRATION & CONCILIATION ACT, 1996, (9
th
ed. 1994).

WEBSITES AND ARTICLES
Jackson H. Ralston, International Arbitration From Athens To Locarno 153-154; John L.
Simpson & Hazel Fox, International Arbitration: Law And Practice 1 (1959)
http://www.pca cpa.org
http://www.alway-associates.co.uk
http://www.uncitral.org
Gary B. Born, International Commercial Arbitration, 187, 197, 217 (2009);
http://interarb.com/vl/g_co1927
http://legal.un.org/avl/ha/crefaa/crefaa.html
http://www.wipo.int/amc/en/arbitration/ny-convention/text.html
http://www.uncitral.org/pdf/english/texts/arbitration/NY-conv/XXII_1_e.pdf