ABSTRACT

In the need of Conventional system and contemporary legislation is a matter of great concern in
the face of global economic meltdown. Arbitration occupies “a space between business and
politics”. Technically, arbitration is an arrangement for submitting disputes to an impartial
decision-maker chosen by the parties. In the wake of the modern explosion of international trade
and transnational investment, however, arbitration has become "the accepted method for
resolving international business disputes." Maritime Arbitration has huge coverage of legislation
but this research paper will bring maritime arbitration under the single umbrella of resolving
maritime disputes in Asia. As Asia is currently the scene of some of the most high-profile
maritime disputes in the world. Even though the majority of states in Asia are parties to the
United Nations Convention on the law of the sea (“UNCLOS”), its dispute settlement system has
only been utilized in a handful of cases. Given that negotiations have brought about limited result
in easing many of the tensions, it is worth asking whether the maritime arbitration dispute
settlement system can make meaningful contributions to resolving thorny disputes between
Asian states. It does so by providing a solution to the dispute brought before them, clarifying the
legal framework for the conduct of the parties and facilitating cooperation amongst countries in
the region. This research paper will consist of recent maritime arbitration settlement system,
recent changes and researcher will brief about the comparative study of Islamic law of mediation
and importance of Med-Arb in Maritime Arbitration and its dispute resolution clause.
KEYWORD

BACKGROUND

Since its origin, arbitration has been extra-judicial method of solving dispute. It is probable that in the
beginning some form of sacredness was attached to it, hence the arbitrator but earlier times “sovereign”
acted as representative of god on earth. Arbitration is an important tool in alternative dispute resolution.
It is defined as a binding resolution of a dispute through the ruling of one or more individuals, appointed
by the parties.It has long been the dispute resolution method of choice in the construction, energy and
insurance fields. It is used in the areas of banking, intellectual property, financial service sectors and
complex commercial disputes. At a fundamental level, parties use international arbitration to resolve
disputes using an arbitrator. By selecting arbitration, parties effectively waive their rights to litigation.
The frequently cited advantages of arbitration include efficiency, procedural flexibility and neutrality of
arbitral procedure and cross border enforcement of decisions. Essentially, arbitration permits
commercial parties to tailor the dispute resolution process to their needs.

Arbitration carries real economic and social benefits. The national laws and policies regarding
international commercial arbitration have implications for each nation’s economic and political
standing.8 National systems of law govern disputes in different ways. This raises questions as to the law
that applies and the procedural rules to be followed. Such authority is referred to as arbitral jurisdiction
or the principle of competence competence. This thesis examines core attributes of the arbitration
process in Asia among India and U.S.A.

The analysis pursued in the following chapters shows that courts play a key role in determining the
ability of an arbitral tribunal to rule on its own jurisdiction. At one end of the spectrum are national
courts which provide maximum discretion to the arbitral tribunal to determine its own jurisdiction, only
intervening if there is a serious defect in the arbitration agreement. At the other are national courts
which view arbitral jurisdiction as an optional right to be determined by judicial review.

CHOICE OF ARBITRATION JURISDICTION: CONTRASTING THE COMMON LAW AND CIVIL LAW APPROACH

The choice of two common law jurisdictions and a civil law jurisdiction was made for various reasons.
Arbitration practice in the United States, United Kingdom and France has had a major impact on
arbitration globally.28 The United Kingdom provides a model for the common law approach to arbitration
law and has influenced African and Asian legislation. Conversely, the French model has been influential
in the Middle East and, to an extent, in Africa as well.
Another reason for choosing these countries is that they belong to different legal traditions. The French
belong to the civil law tradition, while the United Kingdom and United States are predicated on the
common law tradition.30 Moreover, notwithstanding their common law origins, the United States and
United Kingdom have discernible differences.

2 Critiques of Arbitration: Is Arbitration Facing a Crisis of Confidence?

In recent times, arbitration has been subject to extensive criticism. It has been alleged that international
commercial arbitration faces a crisis of confidence. In particular, the principle of compétence-
compétence has been called a ‘judicial fiction’ by Brekoulakis who claims there is no basis for the
tribunal’s power to determine whether it has jurisdiction. 88 He argues that a tribunal has no jurisdiction
unless its power is ascertained pursuant to the arbitration agreement first.89 Conversely Born and Lurie
contend that if the parties have conferred the tribunal with power to rule on its jurisdiction, this should
be upheld in accordance with the general principle of freedom of contract.90 In the majority of
jurisdictions, the courts still reserve the right to intervene in limited circumstances – judicial review is not
absolutely ousted.

The court’s right to intervene provides a safety net for the parties in the event that the tribunal lacks
jurisdiction to rule on the dispute or exceeds its scope of jurisdiction.92 The significance of the function
of national courts was stated by Lord Mustill who opined that ‘it is only a court with coercive powers that
could rescue an arbitration which is in danger of foundering’.93 In this context, national courts fulfill a
crucial role in ensuring that:

(a) arbitral tribunals act within the powers conferred on them;

(b) support is provided for the arbitral procedure and

(c) rights of the parties are not abrogated.

At times, the involvement of national courts tends to hinder the arbitral process rather than offer
support. In some cases, supervisory and judicial powers are misused, the casualties of which are the
parties to international arbitrations.This has led to concern amongst the relevant stakeholders – i.e. the
law firms, arbitral institutions and locations which have a financial interest in the continued proliferation
of arbitration. Other reasons for the alleged crisis of confidence are that the traditional benefits of
arbitration such as efficiency, procedural flexibility and low costs do not necessarily hold true.98
Arbitration is frequently costly and may be slow in practice.99 Cost and speed are subject to a number of
factors. Users of arbitration have attributed delays on the restricted availability of top-tier arbitrators and
their meticulous concern for due process.100 There is a benefit to the users of arbitration in this finding,
as it implies toptier arbitrators seek to provide accuracy and fairness which should decrease the
likelihood of undue cost and further delay in appeals of awards to courts.101 Costs may inevitably
escalate if the dispute is complex and involves multiple parties. This is no different to the escalating costs
of such a dispute if it were heard by a court. More importantly, scholars such as Reed argue that a
majority of the criticism regarding cost and efficiency of arbitration is aimed at arbitrations where states
are the investors, which entails a more transparent and political procedure than international
commercial arbitration.

There is widespread criticism in the literature that counsel acting for parties in international commercial
arbitrations make inadequate use of the flexibility of procedural rules, as they tend to conduct
arbitrations similar to litigation.115 This criticism carries weight, especially in relation to arbitrations
conducted by common law lawyers, who tend to use court-like procedures. Similar views have been
voiced by numerous practitioners and lawyers.116 One of the reasons why arbitral procedure is
beginning to resemble litigation may be that arbitrations are becoming increasingly complex.117
Multiple contracts have become common. Further, international projects have more parties as joint
venturers who have distinct responsibilities. Such parties often have competing interests when a dispute
emerges. Frequently, parties to a dispute are from different political and legal backgrounds, thus there is
less agreement on how the arbitration ought to be conducted.118 Lastly, previously inarbitrable subject
matter such as consumer disputes are now capable of being arbitrated in some jurisdictions.