Sunday, April 10, 2016


Effective administration of justice has been an age-old criterion of judging the mark of any notable king, civilisation or government. With the passage of time, several methods were invented and put to test for dispute resolution with a view to serve the idea of justice. While some methods have stood long to the test of time; many have failed. International Commercial Arbitration is one such method that endured itself in the history of dispute resolution. The reason why the subject grew so much in its scope and its importance is the increasingly complex nature of cross-border commercial transaction.

The principles of dispute resolution be method of international arbitration have evolved from the times when the economy of a country remained relatively independent from the other countries. However, the twentieth century changed the economic world order over and again. Foreign investments became quintessential to provide thrust to the economies of underdeveloped or developing countries. This realisation came in with era of globalisation and resulted in an unprecedented rise of cross-border transactions to grease the wheels of foreign investment in their respective countries.  Therefore, it was important for the evolution of an effective method of dispute resolution and hence, the concept of International Commercial Arbitration was envisaged. With this quaint introduction to the concept, this commentary would now elaborate upon the features of the concept.
While there is no authoritative definition of the concept, Gary Born  has defined the concept in the following manner:
“International arbitration is a means by which international disputes can be definitively resolved, pursuant to the parties’ agreement, by independent, non-governmental decision makers, producing a legally binding and enforceable ruling.”
A very generic definition of International Commercial Arbitration can be said to be a mechanism of dispute resolution governed by an Agreement between parties having their place of business in different states.

At this instance, it is also appropriate to highlight the difference between International and National Arbitration. According to the CISG, the provisions of the convention are applicable to contract of sales of goods between parties whose places of business are in different countries that are parties to the CISG.  This is the most apt legal proposition that distinguishes the two concepts. It is important to understand the difference to appreciate the complexities, such as enforceability of arbitral awards, intervention of the domestic courts, which arise in International Arbitration as opposed to Domestic arbitration.

The primary source of law for an Arbitrator is the Agreement which governs the commercial relationship between the parties. A compulsory arbitration clause highlights the importance of methods alternate dispute resolution and the commitment of the parties towards resolving the issue in a timely manner.  If the arbitration was going to be US-based, then there are many sources of arbitration law as per the United States. It is important to mention here that the parties enjoy the complete independence while negotiating the Arbitration agreement. Now, the primary legislation governing the arbitration law differs from state to state while conforming largely to the Model law.
The scope of jurisdiction of a tribunal conducting arbitration emanates from the International Contract which gives rise to such dispute.  As per the Model Convention, the term-“Commercial” is given a wide interpretation to include all the connotations that can be reasonably attributed to a commercial relationship. The Model law also provides an indicative list of the examples of commercial transactions.
The reason why the Seat assumes importance is that it determines the scope of intervention by a domestic court. Now, it is a cornerstone principle of arbitration, that the proceedings before the arbitral tribunal should not be interfered by the domestic courts. Moreover, the governing law for the arbitral tribunal is dependent upon the seat of arbitration. The governing law provides for several procedural aspects of the proceedings before the tribunal as well as the powers of the tribunal while adjudicating upon the issues. Another major issue that emerges out of any discussion on the “seat” of arbitration is the arbitrability of the dispute. The dilemma around the arbitrability arises out the conflict between the substantive law and lex arbitri. An ancillary point regarding the seat could be that there are chiefly two methods of arbitration - ad-hoc and institutional arbitration.Arbitration and its concepts can be too much for a beginner just incase you need help there are always services like business law assignment help to come to your rescue.
While the Model law has brought a certain measure of uniformity and coherence in the manner principles of International Commercial Arbitration are interpreted, there is lot to be done. Just like assignment writing ,essay writing even understanding arbitration  takes quite some effort.