INTERNATIONAL COMMERCIAL ARBITRATION (ICA)

 

ADR – Alternate Dispute Resolution

WHAT IS ADR?

         Dispute Resolution can be conventionally through existing legal system.   The legal system as in today exists takes enormous time & is costly for being very effective.  Courts are crowded with huge number of cases with technical procedures & dispensation of justice is inordinately delayed.   For this reason there shall be an alternate mechanism of resolving disputes within the legal framework yet not depending on civil courts only.  This ADR could be,

Ø       Mediation

Ø       Conciliation

Ø       Arbitration

Ø      Settlement.

 

Advantages of ADR:

1.            Familiarity with Procedures: National Courts may not be familiar with international contract dispute.

2.            Procedures are simple compared to civil procedures in many countries.

3.            No home court advantage: Arbitration could be on a neutral place.  Neutral country arbitration.

4.            Choice of law: National Judges will lean towards laws of their home country.

5.            Clear Jurisdiction: Suits will raise doubts on jurisdiction whereas it is clear in ICA.

6.            International enforcement: About 100 countries are signatories to New York Convention.

7.            Confidentiality: Proceedings before Tribunal & awards are kept confidential.  No media publicity is given.

 

COMMERCIAL vs. STATUTORY ARBITRATION:

       In economy, time is a function of money.  It is advisable to have Arbitration Clause in every commercial contract.  The arbitration resolves disputes among parties to commercial transaction.   It is called commercial arbitration.

       When parties are within India, it is DOMESTIC commercial arbitration; if parties are one within India & one outside India, it is INTERNATIONAL commercial arbitration.

       There is statutory arbitration where arbitration is specified in the statues itself.   For instance, Section 7 of Indian Telegraph Act, it is statutory arbitration.

 

INSTITUTIONAL ARBITRATION / RULES OF ARBITRATION:

ü      ~ ICC, Paris – International Chamber of Commerce;

ü      ~ LCIA – London Court of International Arbitration;

ü      ~ AAA – American Arbitration Association.

 

 

 

NEUTRALS:            They are nominated by AAA, who are recognised for their standing, expertise in the field, their integrity & dispute resolution skills.   Neutrals are nominated to the ROSTER (list of persons) of Arbitrators & Mediators of AAA elected from among eminent leaders in the industry & profession.   This conduct is guided by the code of ethics.

 

UNCITRAL: - United Nations Council on International TRAde Laws

v A legal body within United Nation in the field of International Law.

v Their aim is to have uniform laws in trade laws of different countries.

Works carried out by UNCITRAL:

1. International sale of goods & related transactions:   Comprehensive rules on International sale of goods & limitation period for commencing legal proceeding for International sale of goods.

2. International transport of goods:  A convention setting forth a uniform legal basis on rights & obligations of shippers, carriers, consignors, etc…

3. ICA & Conciliation:  UNCITRAL arbitration rules adapted in the year 1976.   It provides for comprehensive set of rules upon which parties may agree for conduct of arbitral proceedings arising out of their "commercial relationship".

      Conciliation Rules, 1980-amicable rules are provided through Conciliation.   Our new law Arbitration & Conciliation Act, 1996 is based on UNCITRAL model.

4. Public procurement & Infrastructure development – assists states in reforming & modernising laws.   Modern law containing procedures aimed at promoting competition, transparency, fairness & objectivity in procurement thereby, increasing economic efficiency in procurement.

5. Construction contracts – UNCITRAL legal guide for construction of industrial works.

6. International Payments – This convention provides for comprehensive legal rules governing International Instruments such as International Promissory note, bill of exchange, etc…

7. Electronic Commerce – Model law on e-commerce is to facilitate use of modern means of communications & storage of information such as Electronic Data Interchange (EDI), email, telecopy, etc…

8. Insolvency: UNCITRAL model law on cross border insolvency aims to promote modern & fair legislation where the insolvent has debts in more than one state.

 

 

Also, read Indian Arbitration Act, which is modeled on the basis of UNCITRAL.

 

I See Yeh ! Yeh tho Ho gaya … Enjoy !

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